My Idea to Help the Economy and the Credit Crunch

Consumer savings are way up. Doesn’t more savings mean more money in banks to lend? Isn’t that a good thing?

Here is an idea for you. Create rewards for putting those savings in lending institutions, and reward the institutions for lending it out.

Make the interest earned on savings accounts and CDs tax free for individuals and corporations if the funds are deposited with lending institutions that lend out 100pct of those funds. Its a simple concept. If we are going to increase our savings, lets make sure that money is recycled into the economy and frees up credit.

Here is how I see it. As of June of ‘08, there were 7 TRILLION dollars in deposits held by lending institutions. If that number can grow by any percent, and be recycled into the economy through incentives, it completely changes the dynamics of an economic incentive plan. Plus, Im certain that banks would rather take in funds through deposits than by being required to pay 10pct for government bailout money.

More importantly, it works in a manner that we all understand. The only certainty about the proposed stimulus programs is their uncertainty and the queasy feelings we all will have as we watch the rules of unintended consequences create headlines on a weekly basis.

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About Mark Cuban 144 Articles

Mark Cuban is the owner of the Dallas Mavericks basketball team, billionaire internet entrepreneur, and chairman and owner of the high definition television channel HDNet.

Mark made business history when at the age of 32 he sold his computer consulting firm MicroSolutions to corporate giant CompuServe and became fabulously wealthy overnight. Cuban later did the same with yet another enterprise, the live streaming Internet operation, and sold it to Yahoo! for a record breaking price that pushed his own net worth into the billions.

He publishes his own blog at Blog Maverick where he speaks freely about basketball, technology, business, and the Internet.

Visit: Blog Maverick

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