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Thursday, March 13, 2014

An economist's proposal


And it's both fair and intelligent. Logical, even. Too bad it won't take place.



"The $26.7 billion in bonuses Wall Street banks handed out just a few months ago during bonus season at the end of 2013, would be enough to more than double the pay for all 1,085,000 of America's full-time U.S. minimum wage workers (according to a just-released study by the Institute for Policy Studies, based on new data from the New York State Comptroller).


Those giant bonuses weren't exactly the result of the bankers' extraordinary insights and skills. Most if not all came as a result of the hidden taxpayer subsidy given to Wall Street banks in the form of a virtual guarantee against failure that reduced their borrowing costs by .8 percent. Multiplied by the total liabilities of the 10 largest banks, that taxpayer subsidy was $83 billion last year, roughly equal to their profits.

Get it? If we taxed that bank subsidy away and gave it to low-wage workers in the form of a wage subsidy instead, it would double the pay of minimum-wage workers."



And that higher pay to minimum wage workers could and would lift plenty of people out of poverty and that would, then, take more off government assistance but also create more demand in the economy for goods.

We all win. The nation wins. We move forward, in at least a few ways.

It would be progress.




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