Reciprocal Grant Program Vs. Corporate Stimulus Funding

According to John McCain's Facebook posting Lockheed Martin received $4.7 Million "to develop supersonic corporate jet travel." Aviationexplorer.com, a website for aviation enthusiasts, states the "supersonic bizjet" is an ongoing experimental project of Lockheed Martin who plans to develop the aerodynamic plane capable of amazing speed, for use in the undetermined future. Their goal is to produce transportation that will reduce international corporate travel time by creating a plane with fierce speed that will control it's "sonic boom, allowing it to fly over land" at a reduced speed, then speeding up considerably while flying over water to reach overseas destinations faster.

Lockheed Martin has received some of the highest paid contracts from the stimulus package including "166 million" dollars to assist NASA in the development of a replacement space shuttle. "Though Lockheed officials could not provide a job-impact estimate to The Denver Post for its stimulus-funded work on Orion (the space shuttle replacement), a spokeswoman said nearly 1,000 Lockheed Martin and subcontractor employees in Colorado work on the project." That is a total of $166,000 per individual on the project if you were to divide the expenses evenly by the number of contractors on the project.

Putting stimulus money in the hands of major corporations, like Lockheed, is like giving McDonalds a billion free hamburgers. They don't need them, they already have enough of their own and the means to obtain more if they need to restock the freezer. They can do it on their own. They can raise their own money. So why give them more? Give it to the people who need it the most and they will pass it along to the big companies by way of purchasing what they need for survival. That is the right way to stimulate the economy.

By creating incentives for individuals to work, learn, or take steps toward personal growth, the economy will be better as a whole and more balanced. By creating random jobs and throwing money into the economy with no real plans is plain ignorance. Most people don't understand how throwing 4.7 million dollars into developing a futuristic plane will help stimulate the economy or benefit the "majority of the masses." The government needs to stop giving handouts and offer monetary incentives to individuals in need, who are willing to work to improve and not just stand in line for a hand out.

Recovery.gov is a website established by the U.S. government under Obama's stimulus plan to "Track the Money" dished out on the stimulus plan. Obama assured the country that there would be transparency to disclose who received funds and where the funds were applied. However, if you go to the website, you will find more confusion than transparency. I have 4 years of college with a business degree and it is complicated for me to understand. Imagine how the average Joe feels when trying to get answers about where the money went. Several of the categories listed under each project indicated that they were not "required to report".

I can think of an endless number of ways we could have spent the stimulus money that would have made an immediate impact on the economy and none of them include space exploration or a futuristic corporate jet project. $787 billion dollars should have been put in the hands of "We the People" who need it the most. Millions of Americans barely have life-sustaining necessities much less a monetary opportunity to create a better future for themselves and generations to follow.

Corporate America will always find a way to earn more money. The government needs to do something for the rest of the population that is suffering daily without basic needs or available opportunity. The misfortunate children left behind by their parents who turn 18 and have to work instead of going to college, the poor, the homeless, and individuals who would like to start a business but don't have the means, are all begging for "change" but have received only disappointment from a careless government.

787 billion is such a huge number that most calculators will not even tabulate the number and the average person can't conceptualize how much that really is in a pictorial sense. According to US News, The United States currently has a population of more than 305 million people. Of that 305 million, 217 million individuals are over the age of 18 and aside from those who are disabled, can work or contribute to the growth of our nation. In October of 2009, the Bureau of Labor Statistics reported "Median weekly earnings were $738" dollars per worker, or just over $38,000 per year. That might not seem like a whole lot, but many people can survive on as little as $20,000 per year if they are not over spending on frivolous purchases or living beyond their means. An individual making just $8 per hour working 40 hours per week earns less than $17,000 per year.

If the U.S. government was really concerned about the stimulation of the economy and helping those in need, it could have invested $20,000 in more than 39 million people with the 780 billion dollars they spent on the stimulus bill. Instead of investing in large corporations or frivolous projects for space exploration, they could have made an immediate and drastic impact on the economy and the overall personal growth of every individual in the United States.

I have spent a lot of thought on this subject, unlike the government who simply reacted with a pork-barrel spending business as usual attitude. I developed a program that offers financial incentives to individuals that will stimulate the economy in exchange for a commitment of personal growth and community contribution. I call this introductory program the Alternate Economy Stimulation and Debt Relief Grant Program, which I will refer to as "The Reciprocal Grant Program" because it is a give and take project that is reciprocal in nature.

The Reciprocal Grant Program would award up to $20,000 in free grant money for as many as 39 million people, at a total cost which is substantially less than the existing stimulus bill of $787 billion dollars (39 million recipients, multiplied by $20,000 per grant = $780 billion- 7 Billion less). The program would establish eligibility requirements for recipients and then delegate categories for spending the grant money. It would allocate the funds directly to the 3^rd party on behalf of the recipients in order to control the funds are property distributed. There would be no need for web site reporting to create transparency to the nation.

The goal of the grant would be to improve the overall state of our nation immediately by stimulating the economy in targeted areas. It would encourage non-working and unemployment drawing individuals to return to work in the private job market, community service, or a branch of the U.S. military. It would also accommodate additional funding for those who desired seed money for business start-ups or small business growth and development in order to create new jobs. The overall desired effect of the grant would be to decrease the undereducated population, to provide business and job opportunities for those who have not been exposed to opportunity, and to substantially reduce unemployment rates of our nation. The Reciprocal Grant Program would create a more responsible economy by giving each individual an opportunity to acquire the tools to be self sustaining.

The basis of the Reciprocal Grant Program would work in a way that would encourage people to get back to work, something the unemployment program doesn't do. I know plenty of lazy people who prefer to just sit at home and draw unemployment because they see it as an opportunity to receive free money and take a short vacation from working. Most people are not on unemployment because they can't find work. They simply choose not to work because the incentive to stay home is greater than the incentive to return to a job they don't like. This is a whole other topic though.

With a grant based stimulus program, the government could identify eligible individuals based on current income and need through a quick application process. Pre-established standards could mark certain individuals as targets for this program. In order to make a great impact, the application term would have to be a short lived period of time, quick and concise, much like the cash for clunkers program. This would require people to make a decision and become active quickly in order to benefit from the program. My grandma used to say, "Poop or get off the pot." That pretty much sums it up.

Targeting recipients in need would be relatively easy. Most of the recipients would come from the non-contributing, hand-out accepting, portion of the economy. The basic eligibility requirements of the applicant would include the following:

*Must be 18 years of age or older and not a dependent living with parents.

*Must have income of less than $38,000 per year individually and less than $50,000 household income if more than one income in the same household.

*Must currently have a job working a minimum of 15 hours per week, or be willing to participate in a community service program to earn your unemployment pay. Exception: Full time College students, or those enlisting in an active duty branch of military service which have additional guidelines)

* Disabled individuals will qualify for grant but only for the purpose of paying past due medical bills up to $20,000.

* Applicants may not be on unemployment at time of disbursement and will become ineligible for unemployment disbursements for up to one full year after receiving the grant money.

The 15.4 million people currently on unemployment would be the first individuals targeted to receive the grant money. They would be offered the $20,000 reciprocal grant money if they agreed to complete a minimum number of hours community service each week for their unemployment compensation which would no longer be a handout. They would continue community service for at least one year, or until their benefits ran out whichever is greater, or until they found a permanent job on their own. Instead of taking a weekly government handout, recipients of the awarded grant money would receive the lump sum payment in reciprocation for their community service or as a reward for finding and committing to a regular job. They would also become ineligible for unemployment for up to one year after receiving the grant money. This would keep individuals from accepting grant money and then not fulfilling their obligations. The grant concept would encourage individuals to get back to work, provide each state with a pool of community workers who are already being paid through unemployment, and stimulate the economy by paying the designated 3^rd party which pumps money back into the economy in designated areas (see "Established uses for grant money" listed below).

Under the Military Reciprocal chapter of the grant, anyone currently drawing unemployment or who earned less than $20,000 in the previous tax year, who opted to join a military branch for active duty service would get a $20,000 bonus upon completion of basic training and assignment of first duty station. The benefit to this chapter of the grant is that it offers education to our community as well as improving the strength of our military. The military provides valuable skills training and certifications that can be used in the private job sector once your military obligation is completed. The military also offers the GI Bill, which will assist with funding of college after your honorable discharge of service.

The College Education Chapter would be another conditional means of obtaining available grant money. Anyone who is currently working at least part time or participating in the community service program 15 hours per week or more, and not on unemployment, would be eligible for the grant money to assist with college tuition or other established uses for the grant money so long as they earned less than $20,000 in the previous tax year and attended full time school.

ESTABLISHED USES FOR GRANT MONEY

Unlike the stimulus bill of 2009, the grant money distributed for The Reciprocal Grant Program would only allow the $20,000 grant money to be allocated to one or more of the following purchases or payments which have been pre-established to stimulate the growth of the economy:

Purchase of a new vehicle (select vehicles manufactured in US by US companies)

Cash for clunkers was a pretty good concept for stimulating the car market in the U.S. Unfortunately, many of the cars that were purchased were not American made cars by American owned companies. For this grant program, the government should work out a discounted purchase price agreement with Ford (for example) or other American brand car dealer to purchase a basic sedan like the Ford Fusion at a price under $20,000 with taxes included. Individuals receiving this grant money will be so grateful for the opportunity to have reliable transportation that they will want to get up every day just to drive to work in their new car.

If the recipient decides to purchase a new vehicle with their grant money, the government will pay for the vehicle on behalf of the grant recipient to ensure the transaction is made and properly paid for. This creates more than two winning outcomes. The car company makes additional sales for the year and doesn't require government bail out money. The grant recipient earns reliable transportation for work and feels good about his government and country. And the grant recipient has now chosen to go back to work and commit to staying off unemployment for an entire year. Should the recipient lose their employment, they will be required to earn their wages through the community service program.

Past due or Prepaid Mortgages with adjustable rate - up to $20,000 to lower

monthly payment, banks must be in agreement to refinance at fixed rate.

Another option for utilizing the $20,000 grant would be to catch up on past due mortgage payments, prepay future mortgage, or reduce your monthly payment by paying down and refinancing your existing mortgage. The winning outcomes for this scenario include keeping people out of foreclosure, which would help the real estate market and stabilize home values, while helping banks acquire more capital and reduce their extended credit.

Again, the recipients would not qualify for unemployment for 12 months, so you would have fewer people on unemployment and more contributors in the community service program.

College Funding - Tuition, books, or housing costs up to $20,000

A college education is one of the best ways to increase your earning potential, yet many people still can't afford to go to school because they don't have enough money for tuition or they have to work and don't make time to attend classes. By offering the $20,000 grant to these selected individuals to return to school for specific degrees, you can help them to secure an education in one of the chosen professions in high demand. The grant would only apply to students who are going to school to be nurses, teachers, or computer analysts. By limiting the grant to these professions, you can ensure a greater chance of success after they graduate because of the current market demand. Many of these programs offer 2 year degrees that would help them start working right away. Because most individuals who qualify for The Reciprocal Grant Program will also be able to get full funding from federal aid programs, students may elect the option of utilizing their $20,000 grant money for a vehicle purchase, mortgage payment, or medical bill repayment.

Past due medical bills - Any outstanding medical bills

Right now the U.S. government is looking for a way to correct our Health Care issues and they are not really addressing the main issue. The source of increased health care costs is the billions of dollars each year that is discharged in bankruptcy by the uninsured. If recipients of the grant money utilize their $20,000 to pay back past due medical bills instead of claiming bankruptcy, they may be able to still salvage their credit and ease the burden of unpaid bills that is causing everyone else's medical expenses to go up. By helping to reduce the cost of medical services, health insurance coverage costs will also go down.

Overall The Reciprocal Grant Program allows those in need to earn financial assistance from the government while putting the money back into the economy in the sectors that need the most stabilization. By handing out grants in the form of stimulus money directly to the corporations that needed stabilization, and bypassing the consumers who need to pay for their products and services, the government missed an important step. It forgot to help the people who were suffering at the hands of the big corporations, banks, and failing health care system.

Had Obama bailed out the people in their time of need each individual would have been able to make their mortgage payments and avoided the snowball effect of bad credit, inability to purchase new cars, and loss of jobs from declining product sales. The government must have forgotten what caused the market decline in the first place. The Adjustable Rate Mortgage and high risk loans were a primary factor causing individuals to stop making payments, acquiring poor credit ratings, and causing the banks to fail. That created a snowball effect on other markets. Instead of giving money to large corporations, they should have considered a program like the one outlined here that would have still put money in the hands of the banks and corporations but would have been disbursed through the people who needed it the most, consumers.

I think government forgot that the core of all large corporations is not the corporation itself, but the patrons who support that business and pay for it's products and services. If the government wants to make a real "change" they need to start with "We the People."

NOTE: The Reciprocal Grant Program is an original idea of Lisa M Sanborn, the writer of this article and is not an existing program. It is just one opinionated idea expressed individually by the writer about an unforeseen alternative to the stimulus program which has already been executed. I am not suggesting we spend an additional $780 billion dollars to increase the national deficit without addressing how we might recoup the costs.

Sources:
aviationexplorer.com
denverpost.com
Recovery.gov
US Bureau of Labor Statistics