Stimulus Mobilization And Universalizing Capital Ownership –– What To Do NOW (Demo)

On July 30, 2020, Gary Reber writes:

Executive Summary

Our people and nation are living twin nightmares of a medical and economic crisis. Our healthcare system and the economy are in danger of imploding.

This article reviews the wreckage the coronavirus pandemic is causing on our lives and the economy we depend on to live. It examines numerous recommendations for aggressive action to legislate stimulus packages by the federal government to:

• stem the spread of COVID-19 

• mobilize the production and procurement of all necessary medical equipment and supplies 

• adopt and execute system reform measures during the emergency and after termination of emergency measures, which will invigorate responsible economic growth and simultaneously create universal personal ownership of the new productive capital formed

At the core of the economic restoration and production proposals is system reform. This would empower EVERY American citizen, those employed and not employed, to purchase self-liquidating productive capital assets with insured interest-free capital credit, repayable solely with the full, pre-tax future earnings of the investments to restore our economy and build a future economy that can support general affluence for EVERY citizen. 

For centuries, most private sector economic development has been financed on credit extended by banks based on the expectation the productive capital assets financed with the credit will produce sufficient profits to pay off the debt. But the system failed to ensure that the ownership of the formed capital assets would be broadly owned, and instead perpetuated concentrated ownership among a wealthy few.

By reforming the system, ownership and power concentration can be reversed with EVERY child, woman, and man having the right to full property rights and equal opportunity and access to the means of acquiring and possessing property. 

This article presents financial tools for democratizing productive capital ownership by reforming the tax and monetary system.

Everything will change due to the impact of the COVID-19 virus. Propertyless, non-capital-owning citizens will have to be resolved to fight together peacefully to make a change for the betterment of EVERY person, and to overcome the ugliness and the injustice of the present system. The pandemic has magnified existing social crises and has shown that the government can act decisively when the will is there, though not everything that can be done is being done.

A Dire Crisis 

COVID-19 is a contagious deadly respiratory pathogen that belongs to the same family as the coronavirus responsible for the 2002-2003 Severe Acute Respiratory Syndrome (SARS) outbreaks. COVID-19 is revealing the failure of our private insurance-based, employer-tied healthcare system and the economy. The pandemic has been wrecking the United States and global societies with economic devastation growing rapidly as public health authorities around the world aggressively move to contain the COVID-19 contagion. The effects of lingering isolation will accumulate over time and exacerbate poverty, as Americans are forcibly removed from their jobs and livelihoods on account of government-imposed measures. The extent of the number of lives that will be lost because of the virus and on account of the economic effects of a lockdown has yet to be determined. As of this writing, over 100,000 Americans have died from the disease.

The global economic collapse triggered by the COVID-19 disease that is causing sickness and death has brought our economy to a standstill with rapidly rising unemployment. Should this epidemic intensify, an already deep recession, will become a depression.

Failure to decisively address the deepening economic impact of the coronavirus pandemic will result in incomprehensible lost lives and a complete collapse of the economy.

The Center for Economic and Social Justice (CESJ.org), a non-partisan think tank promoting universal citizen access to capital ownership, is putting forth recommendations for structural changes to redesign our monetary and tax systems so that EVERY person can acquire and gain incomes from productive capital to become economically self-sufficient and independent. Such measures will facilitate our shifting to green energy sources, technologies, and processes that protect the planet. 

Our focus, at this time, however, is on actions we can take NOW to build a more resilient and inclusive economy that can actively empower people so they can better weather and recover from devastating crises such as this pandemic. The measures will enable our society and economy to build toward strength and preparedness, and endure emergencies, including climate, in the future.

As citizens, we need to unite America and organize to mobilize and demand major transformations. As with past crises, this crisis shows the glaring shortcomings of healthcare, economic, and environmental policies that are failing the people and planet, and at an unprecedented rate. The economic impact is acquiring dimensions that are without precedent in the history of the United States, or for that matter every nation.

Global Supply Chain Disruption

Unfortunately, our political leaders over the past five decades, beginning with the Ronald Reagan and Bill Clinton administrations and those subsequent, have paved the way for an exodus of our manufacturing, led by the controlling owners of American corporations and industries, and their political allies, resulting in direct investment in the development and execution of manufacturing in slave-wage countries. Aided by years of massive tax cuts and incentives they built manufactories and offices around the world, shutting down manufactories and jobs in our homeland. In the case of Communist China, from 1995 to 2015 China managed to deepen its influence all across the world. The controlling owners of U.S. companies, particularly multi-national American corporations, have invested a total of $1.44 trillion in China from 2000 to 2020 (accounting for Inflation). This is far more than the $141 billion the controlling owners of corporations in the United Kingdom/European Union have invested over the same period.  

This investment and exodus have enabled those countries to build their productive and technological capabilities, and in the case of Communist China become the world’s manufactory, while thousands of factories were shut down and millions of jobs were eliminated in the United States. As a result, China is stronger and advantaged as an economic competitor and the United States has grown weaker. 

Restoring manufacturing in the United States no doubt will prove a rough transition, as just in the past two decades since free trade was opened, China has dominated the production of goods previously manufactured in our homeland.

Our government, at minimum, should ensure that contracts are awarded to American corporations whose products are manufactured in the United States. Government research and federal investment should be awarded to corporations broadly owned by citizens, including employees, and be required to manufacture their products in our homeland.

Still, at present, without investment in China, the 6.95 percent RORR (rate of return) would disappear for corporations, as well as the means to pay millions of dollars to corporate boards, CEOs and employees. Without China, profits would be lower and those jobs directly or indirectly dependent on the Chinese would disappear –– amounting to over 2 million paychecks. These are the factors and forces that will resist decoupling from Communist China. To counter, investment must be focused on developing our own technologically advanced manufactories, broadly owned by citizens and employees. This would enable more Americans to become productive and earn more and consume what is produced.

The offshoring of production is the reason the United States is deficient in critical medical equipment, medicines, and supplies as Americans face widespread shortages in the midst of the COVID-19 pandemic. We have put ourselves at unnecessary peril. 

For the controlling owners of American corporations, it was cheaper to relocate production offshore, invest and manufacture goods offshore, and import back the products to the United States. Expanded free trade was supported with tax breaks to corporations offshoring production. Thus, production and importing back for American consumption was made even cheaper and thus more profitable still.

While intermediate supply chain and final goods exported from Communist China to the United States have been halted in some industries, we have yet to rebuild and expand our own homegrown manufacturing capabilities, and, as a result, we remain dependent on foreign supply chain and finished goods production. Not only are we still dependent on China, but even products in Japan’s and South Korea’s supply chains are essentially made in China and other parts of Asia, with materials and goods delivered to those countries, and then exported to the United States. The same situation is true for goods shipped to Mexico from Asian sources and then exported as final goods to the United States –– or from Asia to Europe, and then to the United States. 

The actions that got the United States where we are today include the failure to take United Auto Workers Walter Reuther’s advice to keep wages where they are and help workers get their increases from the bottom line. Reuther warned that higher wages would destroy entire industries by lowering their competitiveness in international trade. Had we taken Reuther’s advice, businesses would not have set up shop in slave-wage countries like China.

Why is broadening ownership so important? Ownership entails reaping the fruits of all contributions that one makes proportionately to the productive process, whether via the productive capital one owns or one’s labor, or both. A person’s labor is compensated either by wages or by a share of what the enterprise produces that is attributable to their labor contribution. It is important for ALL the employees to own shares of the companies that employ them to build a productivity culture throughout the organization. Owning thereby entitles workers to the rewards of their own labor as well as that produced by their proportionate share of the physical capital.

No one knows how much disruption our interconnected and service-oriented economy can endure, especially since the past few decades have seen a debilitating decline in and rapid exodus of our manufacturing capabilities. We should have instead been in constant retooling mode with restoration of our manufacturing capabilities and constant technological improvement through research and development. As a result, we no longer manufacture the clothing, appliances, electronics, furniture, cars, infrastructure materials, lifesaving medical equipment, medicines and all manner of supply chain production, necessary to live and consume in today’s world. 

Such dependency is now painfully evident, as administrations over time have allowed us to become dangerously reliant on medical equipment and supplies, and drug production from Communist China.

While our production of critical medical equipment and supplies is woefully inadequate, China produces a reported 115 million N95 and surgical face masks a day, with a surplus so great that China can supply to countries in need.

If we hadn’t outsourced nearly all of our manufacturing with job-killing free-trade agreements, we would have had the capacity to manufacture testing kits for the COVID-19 disease and not been waiting on Communist China to send them to us (the lack of test kits, rapid testing and investigative contact tracing is the reason we lost the ability to spot and contain the virus). We also would have the ability to manufacture the N95 face masks, shields, gowns, gloves, lifesaving ventilators and other equipment the medical community is in a panic to have to meet the life-threatening challenges of the crisis. While we are supposedly among the world’s leading manufacturers of specialized lifesaving ventilators, supply levels are woefully inadequate and must be urgently ramped up to meet demand and for preparedness in the future. 

The net effect has been a significant drop in our homeland production and our growing dependency on foreign production. Regrettably, producer-corporations have unnecessarily extended their supply chains and finished goods manufacturing to all parts of the globe and invested in lower-cost foreign production in order to boost short-run profits and share prices for their owners. As a result, the American economy is exceedingly vulnerable to external shocks to our supply chains as the world’s supply chains are fixing to buckle and freeze-up, thereby causing production and incomes to fall abruptly. In turn, shrunken incomes and cash flows will collapse the edifice of non-productive debt and speculation that has been piled atop the American economy.

This crisis should finally make everybody realize that there needs to be self-sufficiency for EVERY individual and the country. We must decouple our manufacturing reliance on other countries, to the greatest extent possible, and fully develop our economic infrastructure to produce in our homeland.

Collapsing Consumer Demand

As the pandemic spreads, people are being instructed to “shelter in place” and practice physical “social distancing,” with the result being the economy is shutting down. Small- and medium-sized businesses, especially in the retail and service industries, are without customers and being forced to close their doors, not sure they can reopen anytime soon, if at all.

The outlook is precarious for businesses closed by the pandemic –– they will not just magically re-appear after the pandemic. With the disappearance of customers, businesses are being forced to lay off workers, or entire staffs through no fault of their own. This especially impacts service sector work that is a large part of the economy. Landlords face a wave of missed rent payments from tenants who were ordered by public officials to lock their doors to slow the rate of infection transmitted by gatherings of customers and workers. As well, as desperation builds and months of rent and bills arrears accrue, millions of tenants are voicing “cancel rent” demands. As a lot of small- and medium-sized businesses are essentially wiped out, not to recover, our economy will be much different afterwards.

With workers being separated from their workplaces, consumers from shopping malls, diners from restaurants, travelers from airlines, cruises, hotels and resorts and much more, the economy is becoming comatose. With fear widespread, people are going into survival mode.

The collapse of consumer demand and spending also is spreading and deepening rapidly in national industries. Demand for travel-related spending, leisure, out-of-home entertainment, etc. has been impacted. Except for healthcare, consumer demand for personal services and pastime diversions has ground to a halt. 

Along with brick-and-mortar malls and merchants, which have been forced to close, restaurants and storefront services also have shut down and are deserted. Social entertainment is suspended everywhere. Even grocery stores, an essential sector of the economy, are experiencing empty shelves, and consumption in basic necessities is precarious.

Decline in demand also is impacting businesses that set up higher-skilled employees to work from their homes. They are furloughing workers as sales revenue plummets. This includes business services and professional workers such as lawyers, architects, consultants, advertising professionals, software specialists, and workers in financial services, real estate, media and telecommunications, audio-video electronics, entertainment-production and post-production, and other industries where it is feasible for employees to work from home. Increasingly, demand and revenue for these business sectors is declining and is not enough to sustain employee pay and pay for basic operational obligations their facilities require, such as rent, building and grounds maintenance, utilities, equipment leases, etc. 

A report from the Commerce Department showed retail sales- and food services-spending dropped 8.7 percent in March, a new record as consumers reined in spending. This is more than two times worse than the previous record drop of 3.9 percent in November 2008. Consumer spending accounts for 70 percent of the nation’s gross domestic product (GDP). 

Bankruptcies will soar in the coming months because of the way our economy has been completely disrupted since February.

Education has been driven to online resources and home-schooling, but not all families have the resources and materials necessary to cope.

Online purchasing is now developing huge backlog and delivery problems. Online consumer behavior is frenetic and online shopping is sure to permanently gain an even bigger share of buyers’ purchases, while surviving store merchants and their employees experience darker times.

Our interstate distribution trucking system, which everyone relies upon, could easily be threatened as truckers grow increasingly susceptible to infection due to their work conditions. Without truckers, merchants will be unable to receive merchandise and food.

Services provided by state and local government are declining as tax revenue plunges, requiring necessary worker furloughs and other cost reductions.

Precaution is the new norm. 

Unemployment

The halting of all nonessential production means that the number of unemployed will rapidly reach levels that will equal and possibly exceed those of the Great Depression of the 1930s, which peaked at 25 percent. This means large sections of the working class and middle class, and the poor are threatened with the loss of their income and the ability to buy food and essentials and cover their weekly and monthly expenses. 

The situation has drastically worsened in a short period of weeks and is projected to get worse. The St. Louis Federal Reserve warns that 32.1 percent unemployment is possible by the end of June 2020 or 47 million unemployed. The Federal Reserve research concludes that 66.8 million workers in “occupations with high risk of layoff,” including sales, production, food preparation and services, will be impacted. 

The initial seven-week unemployment numbers have surpassed an Oxford Economics projection that 27.9 million jobs would be lost during the pandemic, including 7 to 10 million in industries beyond those ordered to close. Brookings reported that more than 24.2 million workers are employed in high-risk industries and face significant virus-related work disruptions.

According to the Labor Department, nearly 4 million Americans became newly unemployed in mid-March alone. A record 6.6 million additional unemployment claims were filed the last week of March. As of the July 30th report, 1.43 million new claims were filed. The total has skyrocketed to 54.6 million Americans newly unemployed as well as on a continuing basis over the more than five-month period since the beginning of statewide lockdowns in early to mid-March in response to the COVID-19 pandemic. Additionally, more than 760,000 people applied the week ending June 18th and 975,000 ending July 16 for benefits under the new temporary Pandemic Unemployment Assistance program created for those ineligible for traditional unemployment benefits like gig workers and the self-employed. The July 9th Labor Department report indicated that new unemployment claims fell to 1.3 million the previous week. Then the July 16th report indicated another 1.3 million filed. The number of people seeking aid — still at historically high levels — had been slowly declining after a steady buildup in new unemployment claims following the outbreak of the COVID-19 virus pandemic in March. According to a Census Bureau the number of workers claiming continuing unemployment benefits rose from 16.1 million to 17 million for the week ending July 18, in contrast to the nearly 32 million workers receiving jobless benefits as was reported on July 8. In addition, 830,000 new claims were filed for federal Pandemic Unemployment Assistance. Furthermore, the $600-a-week boost to state unemployment benefits expires July 31. Overnight, millions will see their incomes cut by two-thirds, from an average of $921 a week in May to about $321 a week. In some states, such as Oklahoma, jobless aid will be cut by 93 percent to $44 a week. While employers are rehiring some of the workers who had been laid off since mid-March, continued increases in the COVID-19 virus could trigger resumed job cuts and further adversely impact the economy. According to the Labor Bureau’s July 2 report, the U.S. economy regained 4.8 million jobs in the month of June, almost double May’s gain of 2.5 million jobs. The report stated that 356,000 job gains were in manufacturing. It is important to understand that the May and June gains reflect a return to work for workers furloughed in March and April. While the economy has since regained roughly 8 million of the jobs lost, a second surge could further slow the recovery. Seventy percent of those who returned to work in June suffered an income loss by doing so. All this translates to labor market conditions that remain in flux as some workers are getting called back to work while others are still being cut. The last two jobs reports showed gains in employment and drops in unemployment compared to previous reports, yet new claims for unemployment benefits continue at historically high levels. The latest July 30th report was the 19th straight week in which initial claims totaled more than 1 million. After steady declines for 15 months, new claims have risen over the last two weeks.

The official new claims for unemployment since mid-March have accounted for over 30 percent of the country’s 164.5-million labor force prior to the pandemic. Initial claims have slowed for the seventeenth straight week after registering 6.87 million for the week ending March 28 and have been below 1.5 million for the last five weeks. As unemployment escalated, it has pushed up the unemployment rate in the double digits to as high as 25 percent! That exceeds the 2007-2008 18-month peak 15 million unemployed during the Great Recession, and exceeds the 22.4 million new jobs created since November 2009 at the end of that recession. 

The Labor Department’s May report indicated there were 20,935,000 Americans unemployed in May and during the week of May 16, 29,965,415 received unemployment insurance benefits. While it has been reported that 2.5 million furloughed jobs returned to the economy as states allowed a limited resumption of economic activity, persistent job losses continue to damage the economy. Those Americans now on furlough are considered unemployed, unless they are expected to return to their previous jobs. The Becker Friedman Institute at the University of Chicago has estimated that 42 percent of people furloughed by the COVID-19 crisis will never get their old jobs back, and only 30 percent of those laid off will land new jobs later this year.

As for the extension of the $600 additional weekly unemployment benefit created under the massive CARES relief package passed in March, Republicans were initially opposed to extending the benefit past the July 31 expiration but are now on board with offering more federal unemployment aid at a lower amount.

The Commerce Department also reported the economy’s gross domestic product (GDP) shrunk at a seasonally annualized rate of 32.9 percent during the second quarter of 2020 as the first wave of the COVID-19 coronavirus pandemic spurred an economic collapse of record-breaking speed and size. The biggest component of GDP is consumption, almost 70 percent. According to Agathe Desmarais, Global Forecasting Director at The Economist Intelligence Unit, “this was the steepest decline since the start of the global financial crisis in 2008, when output shrank by 8.4 percent.” Spending on goods and services plunged at a seasonally adjusted annualized rate of 34.6 percent in the second quarter, another record-breaking plunge.

The next Employment Situation report covering the month of July is due out on Friday, August 7.

With no fewer than 33 million who have received unemployment benefits,  and with another 6 million having dropped out of the labor force altogether and no longer even being counted as unemployed, unemployment therefore remains at a chronically high number, at around 40 million –– with about 25 percent of the nation’s labor force unemployed. Thus, both renewed service-retail sector layoffs and new permanent layoffs loom on the horizon.

Added to the growing problem of renewed service layoffs and the second wave of permanent layoffs in the private sector is the growing likelihood of significant layoffs in the public sector, as states and cities facing massive budget deficits are forced to lay off millions of the roughly 22 million public sector workers. This potential public employee layoff wave will accelerate and occur sooner, should Congress fail to bail out the states and cities whose budgets have been severely impacted by the collapse of tax revenues while facing escalating costs of dealing with the health crisis. Estimates as of last May are that the states and cities will need at least $969 billion in bailout funding.

Unemployment is measured in terms only of people who are looking for a job, and since many people will not look for a job under quarantine –– and many businesses and organizations will not be hiring under quarantine –– the percentage of Americans who become unemployed is likely to continue to jump drastically, as the pandemic widens. Many recipients of unemployment insurance are unable to secure new jobs before their weekly benefits expire. People will suffer mental health trauma not knowing whether they will be rehired when the crisis ends. Hundreds of thousands employed Americans have seen their hours significantly reduced. Then there are the hundreds of thousands of people who have no job at all, or too few wage hours, and must struggle to find other ways to survive. And as unemployment dramatically expands, this could trigger appreciable alarm and further worsen the downward spiral throughout the economy. Further, not included in the unemployment stats are the 96 million Americans not in the workforce prior to the halting of all nonessential production. Unemployment is compounded by the fact that most Americans have no savings and live paycheck-to-paycheck.  

How escalated unemployment plays out as employers cut worker wages and benefits often relates to family members, relations and friends who are unemployed, who then are used to remind those employed that they too can join the ranks of the unemployed as there are loads of unemployed people desperate to accept any job, even with reduced wages and benefits because it is better to be employed than not, particularly when unemployment benefits have run out. 

Further, hundreds of thousands more employed Americans have seen their hours significantly reduced. Then there are the hundreds of thousands of people who have no job at all, or too few wage hours, and must struggle to find other ways to survive.

With worker compensation already near the lowest level in more than half a century, the challenge will be to ensure Americans are empowered to earn just wages from their labor and dividend earnings from their new status as productive capital owners to spend on goods and services once the spread of the COVID-19 disease is arrested and a vaccine is dispensed. 

A survey published on April 28 by the Economic Policy Institute (EPI) shows that the unemployment filings significantly underestimates the actual number of people who have lost their jobs since March 15. The EPI survey reveals that for every 10 people who have successfully applied for unemployment benefits during the pandemic, three or four more tried to apply but could not get through to make a claim. An additional two people did not try to apply at all because the process was so onerous.

With respect to unemployment, a lot of people will fall through the cracks in the short term, resulting in tens of millions of Americans potentially unable to produce and consume. To be counted among the unemployed, a worker must be looking actively for work, something many people aren’t doing because of the pandemic. Once out of the labor force for four weeks, the unemployed will be re-classified as out of the labor force and the unemployment rate will no longer capture those workers. Also not counted are non-legal resident immigrants, the self-employed, those working part-time jobs and those who have given up looking for non-existent jobs.  Thus, the unemployment rate will drastically understate the problem.

Further, a prolonged period of stagnation and joblessness will obsolete workers’ skills and experience. As well, employers will execute restructuring plans and adjustments to production with less worker input, and wherever possible, automate with machines and other non-human productive measures and means to attain maximum profitability. And those still employed will experience a lowering level of wages and benefits. According to a University of Chicago report, 42 percent of the jobs that have been lost will never return. The outlook is sadly dismal for even those workers returning to work as they will face the prospect of wage and benefit cuts. This is not only due to the public-health crisis making pay cuts more palatable to workers dependent on a job for their livelihood, but tectonic shifts in the technologies of production and globalization of manufacturing (if unabated) will continue to eliminate the necessity for masses of workers and degrade worker earnings as labor is replaced by “machines” and far more people compete for fewer jobs that pay well.

As companies expand work-from-home operations they also expand the regional scope of hiring same-skilled persons who will work for a much lower wage than those in the immediate locale they now employ. This will dampen the ability of employees to negotiate for raises and benefits as the controlling owners and their company management will more easily find a replacement somewhere else within the United States or abroad. 

Bottom line is the wealth and economic inequality our nation had prior to the beginning of the COVID-19 pandemic will be worse at the end. Unable to produce, whether with one’s labor or one’s capital tools, one cannot consume. Money that is injected into the economy to boost consumption and demand, that is not backed by production and new productive capital assets, has nothing behind it but the ability of the government to tax people. Taxation will become increasingly difficult if people are not able to become productive and start earning real income again.

Fear And Panic

As the crisis widens, Americans are on the edge of panic and are stocking up on groceries, medicines, diapers, toilet paper and other essentials, because we do not know for certain that our systems will take care of us. While goods and services that can be consumed at home will spike in demand, non-essential goods and services will be worst affected. 

By closing businesses and organizations and making workers unemployed (their only source of earning income), people are having their electricity turned off, defaulting on their home mortgages and rents, defaulting on their credit card debt, defaulting on their car loans, defaulting on their student loan debt and experiencing other defaults. With personal and household debt at an all-time high and far too many people in debt of more than a year’s wages, the impact of joblessness will be devastating for persons and lenders.

Households short of income are skimping on food. Without viable earnings, a whole lot of people will no longer have homes. In a country where a majority has little or no savings and lives from paycheck to paycheck, the pandemic is a social catastrophe even for those who are not infected by the virus. 

Two other factors that exacerbate the pandemic are the lack of affordable housing and a homelessness crisis, with a half-million Americans homeless. This situation will no doubt worsen as the moratorium on evictions has expired for about 18 million renters — more than a third of the 44 million total renter households — who live in buildings with mortgages backed by the federal government. With rent bills accumulated over the last four months now due, housing advocates predict a “tsunami” of evictions.

In a pandemic, there’s a huge difference between having healthcare and not having it, between getting paid sick time off work and not, and having access to clean water and housing and lacking it. Unfortunately, these needs aren’t being met for millions of people. And that failure is putting all of us at risk. 

The three groups in our communities who face the greatest threat from the pandemic are the elderly, the homeless and families, particularly with school-age children, struggling to make ends meet.

Further, the crisis of poverty leaves millions of children and adults most vulnerable should they contract the COVID-19 virus. For 40 million poor and low-income Americans, the choice between going to work when you or a loved one is sick or putting food on the table is not new. It becomes a dire situation for one to wait to see if the over-the-counter generic medication will work, rather than risking the time and expense of an emergency room or urgent care visit. Figuring out if it’s better to pay your utility and water bills late and face shut-offs, or be late on rent, is becoming a monthly routine. With the country in an economic coma, those Americans in poverty will suffer to a far greater extent, with a job loss causing desperation.

With the spreading of the pandemic, more Americans will experience this fear. A deep fear of poverty is another factor. Already one in six Americans lives below the poverty line. What will happen to them? What will happen to all of us?

Approaching Depression

Physical distancing required by the COVID-19 virus to slow its spread is, conversely accelerating the spread of the economic impact as workers can no longer work side-by-side, which is crippling our capability to produce, even with the requirement of wearing protective face masks.

In summary, consumption is collapsing, business investment has contracted, and trade is precarious.

We are in recession and on the verge of depression. The statistics are harrowing and an indication that businesses have no ability to provide for their workers, as demand for goods and services has fallen dramatically due to fears of the COVID-19 virus and orders to stay at home. The question now is how deep will it go and how long will it last? The answer depends, in turn, on how quickly and seriously will our elected politicians respond. Reopen the economy too soon, without preventive and treatment measures and assurances that all Americans are no longer threatened, would result in an even greater medical and economic crisis.

Turmoil And Upheaval

If we are unable to stem the fear and depression, people will become irrational and act selfishly, even violently. This will incite turmoil and upheaval, including rampant property destruction and looting. The result of insufficient action to quell any panic will be revolution by pandemic. This begs the question whether our community police forces will be sufficient. They are, after all, just as likely to contract the disease as everyone else. 

Financial Markets Deflation And Default

A third channel of economic contagion is emerging that may dwarf the effect of the supply chain disruption and household consumer demand collapse. It is the condition of the financial system itself.

What began as supply chain and household demand problems will be greatly exacerbated by financial instability.

Globally and in the United States, financial markets are depressing and fracturing, which affects not just secondary stock markets based on unbridled speculation to boost savings for those wealthy enough to have savings in the first place and take risks, but oil and commodity futures markets. Foreign exchange currency markets are being disrupted. Corporate bond markets, which are far more important to real capital asset investment than secondary stock markets, are experiencing great stress. According to reports, banks globally are sitting on $10 trillion in non-performing loans. Should prices collapse further, widespread defaults on paying principal and interest on debt will take place. That will result in massive layoffs, a further collapse of business investment, and a yet further acceleration of contraction of the real economy.

Liquidity (cash) is rapidly drying up throughout the economy as businesses draw down their bank credit lines to zero. This is in order to hoard cash to weather out the storm of consumption and production collapse on the horizon, and keep essential operations functioning.

Businesses are selling their financial assets across the board to gather in as much cash as possible, needed to continue to pay interest and principal on the $10 trillion debt run up since 2008, as prices, sales and revenue drop precipitously in the meantime.

This massive shift to hoarding cash by businesses and consumers will not get relief quick enough, or at all if workers in businesses cannot produce and are unemployed.

No amount of tax cutting will lead to re-investing in production, as demand dies off. Further tax cuts to the wealthy will simply be hoarded, re-invested, or not spent. For households and consumers, job-related tax relief will enable people to continue paying absolute necessities such as mortgages and car loans –– assuming people still have jobs. Without jobs, what money there is will be spent on trying to maintain current consumption, not increase it. 

The same applies to interest rate reductions by the Federal Reserve. Why will businesses borrow even at a lower rate or zero percent interest to expand production, when consumers are buying less of their goods and services, or if they can’t get parts from abroad with which to manufacture? And why would households borrow to take the risk to purchase a new auto or even a new home given the current direction of the economy? Cutting the costs of business investment is now the least important variable determining the outcome of investment. Expectations of a collapsing economy and thus falling profitability is what’s driving investment now –– and the anxiety of being able to continue to pay for debt accumulated in recent years in order to avoid default and bankruptcy.

Broken System

The system is and has been broken since the American Industrial Revolution in that it favors a tiny minority of wealthy capital asset owners who control the corporations that produce goods and services. The system from which they benefit disproportionately denies the vast majority of Americans, the 99 percent, equal opportunity to become fully productive and earn income from productive capital asset ownership, the same source of productive power that makes a few people extremely wealthy. 

When America’s Industrial Revolution began and subsequent technological advances amplified the productive power of non-human capital, as it has to this day, plutocratic finance channeled its ownership into fewer and fewer hands, as we continue to witness today with government by the wealthy evidenced at all levels. While historically, the expansion of productive technology had created jobs, today the trend is that the new jobs being created are increasingly being filled by a “machine” at inception, while the jobs remaining still rest in the crosshairs of technological development and application.

Americans are worried about their futures and how they will “make it” in the COVID-19 post-pandemic economy. People need to know that they can be productive and meet their own and their family’s needs and wants. They need to know that they will be able to produce and earn consumption incomes. In our modern economy, that means progressing from dependency on wage system jobs and welfare support to access to ownership of the capital assets now and in the future that produce the goods and services needed and wanted.

A highly complex set of laws, exemptions and loopholes from laws and taxes, has been enacted by politicians who are beholden to those in the uppermost reaches of our financial system and business world. This corporatocracy controls vast amounts of land, resources and productive capital around the globe –– as well as the politicians they manipulate. Exemptions and loopholes allow the wealthy capital ownership class to protect and increase their wealth and significantly affect United States political and legislative processes. They have real power and real wealth. Ordinary citizens in the bottom 99.9 percent are largely not aware of these systems, do not understand how they work, are unlikely to participate in them, and have little likelihood of entering the top 0.5 percent, much less the top 0.1 percent. Moreover, those at the very top have no incentive whatsoever for revealing or changing the rules or educating others who are ignorant of this essentially invisible apparatus.

The system perpetuates gross economic inequality in that it allows some to benefit disproportionately to the rest of the population, particularly in how the money creation and banking systems are able to be manipulated by government to prop up Wall Street.

The situation is distressing and it will impact the economy for several years before “normalcy” returns and our future is secure and prosperous. “Normalcy” or living as if there never was a pandemic, will not happen until rapid testing and investigative contact tracing is widespread and there are treatments and a vaccine to halt the spread of COVID-19. Even then, how we function, as a society, will be much different and present new opportunities.

According to a report by a cross-disciplinary team of experts, the United States will need “20 million tests per day by mid-summer to fully re-mobilize the economy.” “Broad and rapid access to testing is vital for disease monitoring, rapid public health response, and disease control,” reads the report, assembled by Harvard University’s Edmond J. Safra Center for Ethics. This is a massive challenge considering an average of 146,000 people per day have been tested for COVID-19 in the United States in April. But implementing such a plan would prevent cycles of opening the economy and shutting the economy down because those who are affected could be identified and their contact movement traced, and those identified quarantined and isolated. According to MIT researchers, should quarantine measures be relaxed or reversed prematurely an exponential explosion in the infected case count would result.

What To Do NOW

The coronavirus pandemic has uncovered the failings of our private insurance-based and employee benefit healthcare system and the need to guarantee healthcare to ALL our people –– EVERY child, woman, and man. A universal-coverage, not-for-profit health insurance system financed by taxes to provide essential healthcare to EVERY citizen is requisite and must be available to ALL people employed or unemployed, and every age. This is necessary to replace an extensively complicated network of medical institutions dominated by the profit-making interest of insurance and drug companies. Already, 87 million people living in the United States are uninsured or underinsured, with tens of millions more losing their current insurance due to job layoffs. 

Decades ago, there were 1.5 million hospital beds and an extensive non-profit public hospital system. Before 1980, there were 100 million fewer citizens for those 1.5 million beds. Today there are 100 million more Americans, but only 925,000 hospital beds –– 500,000 fewer. The reduction was due to the shutdown of much of the non-profit public hospital system by narrowly owned, for-profit hospital chains, which bought the non-profits to reduce competition so they could raise prices. Now, as the current health crisis deepens, the emergency requires cots to be set up in auditoriums and college dorms, even parks, because hospitals are overwhelmed with COVID-19 patients.

Manufacture Medical Equipment And Supplies

The first priority is to start manufacturing the goods essential to survival, especially specialty healthcare equipment like protective N95 face masks, shields, gowns, gloves, lifesaving ventilators, hospital beds, infrared temperature measuring devices, medicines, ethanol disinfectants and other medical supplies. We must develop and install a national monitoring program to track the disease. Where necessary, we also must convert adaptable buildings into short-term hospitals and emergency shelter to ensure everyone is safely housed during this crisis. The homeless, survivors of domestic violence, people in prisons and college students quarantined off campus must be able to receive the shelter, the protection, the healthcare and the nutrition they need. Those individuals must be connected with social services to ensure nobody is left behind. Those providing frontline and essential services also must be protected and served.

The President needs to ensure that emergency action will no longer be prolonged, fully act after invoking the Defense Production Act, and actually command the private sector to produce all the necessary medical equipment, medicines, and supplies necessary to care for the virus victims and keep healthcare personnel safe. On April 2, an order, which came in the form of a presidential memorandum, directed six companies to produce ventilators: General Electric Co., Hill-Rom Holdings Inc., Medtronic Public Limited Co., ResMed Inc., Royal Philips N.V. and Vyaire Medical Inc. Other companies need to be encouraged or commanded to support the war against COVID-19.

An essential action is for the President to issue nationwide stay at home and physical distancing orders, and the wearing of protective antimicrobial facial coverings or masks to stem the spread of COVID-19, and prioritize free testing availability to every person so that the number of those infected does not overwhelm our nation’s hospitals and medical staffs.

System Reform

Second, as we conquer this pandemic and push forward, we will need to put into place a reformed monetary and tax system designed to facilitate building a future economy and society that provides equal opportunity for EVERY citizen to participate as owners of productive capital assets. Together we can achieve universal general affluence, based on our core values of fairness, respect, kindness, equal opportunity, courage, persistence, resilience, accountability and justice –– values that can unite us.

The bottom line is that American prosperity must be inclusive, with equal opportunity for EVERY citizen to gain ownership stakes in the corporations growing the economy and to share profits and productivity gains across the economic spectrum. We must include non-managerial and managerial workers, current shareholders, workers not employed in corporations and non-employed citizens –– of every age, race, color and ethnicity.

We must now reform the system and prevent those at the top of the income and wealth scale from exclusively benefiting from economic growth at the expense of the vast majority, and see to it that EVERY citizen, including all workers, enjoy the fruits of economic growth as we, following our triumphal containment of the virus, build an economy that can support general affluence for EVERY child, women and man.

One thing is certain, we have the opportunity to affect necessary system reform before the disruption has a permanent negative effect, and to embrace the development of tectonic shifts in the technologies of production to grow our economy responsibly and sustainably, and protect and enhance our environment so that EVERY child, woman and man can enjoy a healthy and prosperous future.

Aggressive Action

There are calls for aggressive action by the federal government to legislate stimulus packages and print new money funded by what would be the most expansive borrowing our country has seen since World War II. Effectively, the federal government will print trillions of dollars to provide disaster relief.

Emergency income supports required in the immediate NOW should not become part of the permanent system and should be recognized as redistributive expedients to be ended as soon as possible after the COVID-19 crisis is abated. Not government but non-monopolistic market forces in which EVERY citizen should participate as an owner should determine the amount of money in the system. 

The directive is to bolster economic production in a climate in which businesses are unable to open or function fully and people are unable to work, the result of a mandate from the government that has restricted or halted significant economic activity. Unfortunately, under such conditions there necessarily would not be new growth of our productive manufacturing capability.

The hope is that the disease will be controlled and contained, and no further surges will arise while treatments and a vaccine for COVID-19 is developed, tested and disseminated. Then, along with rapid testing and selective quarantine, restrictions can be lifted and economic activity will resume. Still, we should expect the American consumer to be cautious in engaging outside the home, and restoring consumption norms will be gradual and measured.

Further, the impact of any prolonged downturn of the economy could result in permanent small business closures on a large scale and even entire industries –– any business that cannot survive long without customers, and whose cash on hand and revenues are small to begin with. A recent survey by Main Street America found that 7.5 million small businesses in America are at risk of closing their doors for good. A more recent survey showed that even with federal loans, close to half of all small business owners say they’ll have to shut down for good.

Economic stimuli in the moment must focus on emergency government spending and worker income restoration to stimulate investment and consumption. Once the pandemic ends, however, we must immediately shift to long-term systemic reform. The priority must be to create capital ownership estates for EVERY citizen. In the interim, planning for systemic reform and execution is essential and mandatory.

While policy makers and aware citizens know that unlocking the economy will be a difficult and painful process, no one knows exactly what the post-COVID-19 economy will look like.

But one thing is for sure, to ensure a future economy with inclusive opportunity, inclusive prosperity and inclusive economic justice, we must lift unjust ownership-concentrating Federal Reserve System credit barriers and other institutional barriers that have historically separated owners from non-owners and link tax and monetary reforms to the goal of expanded capital ownership. Removing barriers that inhibit or prevent ordinary people from purchasing capital that pays for itself out of its own future earnings is paramount as an actionable policy. 

The key issue in the post economic crisis will not be a lack of new money, but a lack of new owners of productive capital, resulting from a lack of a monetary system that universalizes equal opportunities for every person to access and acquire ownership stakes in the productive capabilities to be developed to meet future economic needs. Had stimulus packages in previous years been designed to create new owners along with new capital formation, our economy would have experienced sustainable and non-inflationary growth. More resources would have been available, and more people would have been economically secure and not dependent solely on jobs to deal with disasters such as the COVID-19 pandemic.

Collateralized by capital credit insurance, self-liquidating capital credit should, as a fundamental right, be made available on an equal basis to all citizens. Over time and exponentially, this would turn today’s non-owners into economically independent owners of productive capital. Such credit would finance the purchase of new or existing productive assets needed by businesses in a growth economy. Future earnings on the shares would pay off the acquisition loans.

Questions To Be Addressed

There are many questions to be addressed:

Is there a role for the federal government to guarantee local commercial bank loans, with zero interest, to provide assistance to businesses to cover their lost revenues, which would be paid back over an extended period?

Is there a role for the federal government to distribute money to citizens affected by the economic recession, including workers who lose jobs, salaries and wage hours, so they can continue to buy essential food and household goods, pay home mortgages or rent, cover the costs of necessities, such as daycare and schooling, and provide for their healthcare?

Is such a safety net possible? Is there any choice given the life-threatening nature of this emergency?

What will be the cost of such safety net expenditures? Where will the money come from?

Trillions of dollars will be necessary to stem the economic downturn that is impacting our nation. Will the allocation of the money go to the businesses associated with the already wealthy ownership class or to those who are overwhelmingly struggling? Will direct payments to individuals in the amounts of $1,000 to $3,000 as a one-time relief or continuous month-to-month relief result in re-starting the economy?

We will be facing mass unemployment and thus with the vast majority of Americans dependent on a job to earn income, a job will no longer be a viable means for millions of people as long as the coronavirus pandemic persists without a cure.

Increasingly, Americans will face unprecedented financial uncertainty and disaster; the stimulus packages will need urgently to address the current devastation and provide support for the aftermath of the crisis and our recovery.

The recession will deepen considerably before it is over. All the efforts by the Federal Reserve and other central banks to pump trillions of dollars more into the United States economy and other nation economies may prove futile.

A JUST Third WAY Response

If people were not surviving paycheck to paycheck, already making a livable wage and generating additional income through Capital Homesteading dividends from 24/7 automated production, they would be better equipped to survive shutdowns and self-isolations while the government figures out how to get them help.

What’s needed is an immediate restoration of consumer household spending power and a protective floor under incomes that may soon also collapse should mass layoffs emerge once again in another two or three months.

In the immediate short term, strictly as an emergency measure, massive government debt will be required, which will add substantially to the national debt now exceeding over $26 trillion (or about $72,000 per citizen) and increasing. This additional debt could amount to over $7 trillion. Such debt results when the government spends money created and regulated by the central bank that has nothing of value behind it other than the government’s promise to pay in the future via taxation. Those measures, however, should cease immediately after the crisis is over. Future taxes should be collected to repay the government’s increasing debt from deficit spending.

Where the new crisis money can be channeled to private sector businesses to produce emergency medical and other supplies needed during the pandemic, such money should flow as loans through financing mechanisms that create equal capital ownership opportunities for every employee in the companies producing the supplies. The government would serve as the guarantor of those loans, and as the customer that distributes the emergency goods where needed. 

Capital Homestead Act

As a matter of national policy, immediately enact the Capital Homestead Act (aka Economic Democracy Act and Economic Empowerment Act) proposed by the Center for Economic and Social Justice. The act would establish citizen tax-sheltered Capital Homestead Accounts (CHAs) for each citizen (see http://www.cesj.org/learn/capital-homesteading/capital-homestead-act-a-plan-for-getting-ownership-income-and-power-to-every-citizen/). 

The Act provides for the post-pandemic response to reform the system for inclusive growth and prosperity, broadening capital ownership simultaneously. The financial instruments and tools provided in the Act would empower EVERY citizen to transition from a non-owning wage or welfare slave, beholden to those who are owners or the government, into an economically independent owner of wealth-creating, income-generating productive capital.

To build a future economy, self-liquidating zero percent interest capital credit loans, collateralized by capital credit insurance, would be equally allocated, on an annual basis based on the projected capital needs of businesses, to EVERY citizen (children, women and men, from birth to death) exclusively for the purpose of investing in the new growth and transferred capital of the economy. These loans would cover all costs of purchasing voting, full-dividend payout shares of corporations and cooperatives that produce goods and services for potential national and global consumers.

The access to insured, self-liquidating zero percent interest capital credit loans would have to be truly universal to remove the stigma attached to means-tested programs such as food stamps. An equal amount of annual capital credit would go to everyone, whether they’re employed or not. No strings attached. No means test. No politicians demanding that you seek out even a menial job before getting the loans.

Each citizen’s capital acquisition loans would be wholly repayable with the full pre-tax stream of future profits earned on the shares, without any requirement to pledge past personal savings or reduce salaries, wages or benefits to invest.

The new monies would be used to invest in responsible and sustainable, environmentally sound growth projects and infrastructure, including alternative energy expansion and other climate crisis mitigation. These new development projects would hire workers in addition to creating new owners. This will be necessary since the current crisis will mean conventional private business investment will collapse across the board and such much needed investment will no longer be forthcoming from the private sector to revive the economy and create general affluence for EVERY citizen.

With the new monies, all manner of environmentally enhanced and sustainable projects can be planned and executed such as clean energy expansion, carbon pollution elimination, public transit development, robust infrastructure construction, smart grid expansion, green building, new “smart” cities, urban redevelopment, housing developments, homeland manufacturing capabilities, etc.

Immediate Response –– Capital Credit And Government Loan Guarantees

We need to use the powerful and proper function of commercial banks to create money by making loans and canceling money once loans are repaid. For this, commercial banks charge a one-time service fee (not interest) to cover administrative costs. Therefore, creating money can be entirely interest free (but not cost free). In addition to the principal to be repaid on interest-free capital credit loans to citizens, there would be a one-time premium to cover the risk of loan default as well as reasonable charges for the services of the Federal Reserve and commercial bank lenders.

Instead of printing trillions of dollars and giving it away, we need to make the money available as commercial loans with repayment guaranteed by the federal government. 

In the immediate short term while the pandemic has the economy locked down, any corporation that receives an interest-free capital credit loan from a commercial bank “sold” to the Federal Reserve through the Discount Window with a federal government loan guarantee (loan default insurance via a Capital Diffusion Reinsurance Corporation or CDRC) would be required to issue full-dividend payout, voting shares in the amount of the proceeds of the loan and allocate the shares equally to each employee. The shares would be put into an escrow account until such time the capital credit loan is repaid. For the duration of the emergency, all debt service payments would be suspended. 

Throughout the pandemic, the corporation benefiting from the federal government-backed grants, loans and loan guarantees would pay EVERY one of its employees an equal amount of emergency wage income sufficient to meet subsistence needs. These subsistence wages could not be used for acquiring capital. Payments for consumption needs should be in the form of grants that are passed through dollar for dollar to employees during the duration of the crisis to support purchase demand and enable the economy to keep functioning. The emergency capital credit loans would be used to finance broadly owned new productive capital investment to restart production and expand productive capacity.

Once the interest-free (but not cost free) working capital and new long-term capital loans are repaid with a reasonable capital cost recovery period, the money that was created to operate and purchase the capital and then repaid would be cancelled, avoiding both inflation and deflation. The capital itself would continue to produce wealth and generate consumption income for its new owners from ongoing full-dividend payouts from profits distributed as dividends tax deductible by the corporation but treated as regular income by the recipients. The capital would produce income indefinitely with proper maintenance and with restoration in the technical sense through research and development. 

When normal operations resume, the corporation would cease emergency subsistence payments, with employees paid at market-determined rates, with any increases coming from profits instead of increasing fixed wages and benefits.

Under this proposal, when a corporation becomes profitable, pre-tax profits paid out as dividends (tax-deductible to the corporation) would be paid through tax-sheltered employee ownership accounts to the loan-issuing commercial bank, thus canceling the corporation’s indebtedness. As the loans are repaid, shares would be released from escrow and put into each employee’s individual Employee Capital Homestead Account (ECHA), a vehicle similar to today’s tax-sheltered Employee Stock Ownership Plan (ESOP) accounts. (ECHAs could later transition to full CHAs when the Capital Homestead Act for all citizens is passed and implemented.) Full-dividend payouts would be passed through (after reasonable deductions for bank administration costs) to each employee to use for consumption.

A politically practical alternative to creating a new legal vehicle (the ECHA) would be to channel government-guaranteed loans made through local banks to a company’s Employee Stock Ownership Plan Trust. ESOPs, which are tax-advantaged corporate finance vehicles, are already recognized under United States law, and thus would not require additional Congressional approval. ESOPs can be used by any company incorporated as a C-Corporation or an S-Corporation. For purposes of receiving government-guaranteed loans for working capital or long-term growth capital, ESOPs should be required to issue and allocate new, full-dividend, voting shares to all employees on an equal basis.

In a worst case scenario, in the event of loan default on the part of the corporation, the federal government making the emergency loan guarantee would repay the balance of the loan to the issuing commercial bank, in which case the loan is extinguished and the proceeds are used to redeem the commercial bank’s paper (promissory note) from the Federal Reserve.

Since 1985 in the United States, commercial bank loans for industry, commerce, and agriculture that have gone bad typically have been between 1 and 5 percent (https://www.federalreserve.gov/releases/chargeoff/delallsa.htm). Assuming that 5 percent of all government-insured commercial bank loans may default, a $2 trillion+ loan guarantee package would cost the government a lot less –– $100 billion or more depending on the total trillions of dollars guaranteed. The government can waive an insurance premium or, for example, charge a 1 percent premium, in which case the government would collect $20 billion and reduce the loss by that amount.

To produce emergency medical and other supplies needed during the COVID-19 pandemic new “emergency money” can be channeled to private sector businesses. Such money should flow as loans through the ESOP financing mechanism. The ESOP can create equal capital ownership opportunities for every employee in the companies producing the emergency supplies. The government would serve as the guarantor of those loans, and as the customer that purchases and distributes the emergency goods where needed.

In immediate and future time frames, we must ensure that federal government grants and loans do not end up with corporations whose controlling owners would buy back their stock, in order to reduce the number of shares so the remaining shareholders can consolidate more ownership, and buy up the assets auctioned off by corporations that go out of business during the pandemic. Otherwise, without ownership-broadening stipulations tied to grants and loans, the result will be the ownership of our nation’s wealth will become even more concentrated than before the pandemic struck. Consequently, there will be more Americans poorer as poverty spreads while multi-millionaires and billionaires become wealthier.   

Recovery Money Creation

As the economy recovers, all money backed by government debt should be gradually retired and replaced with money backed by private-sector productive capital assets.

After termination of emergency financing, EVERY citizen would be able to establish a Capital Homestead Account (CHA) that is legally advantaged to acquire new qualified full-dividend payout, voting shares of any corporation with fully insured, interest-free capital credit. A one-time premium to cover the risk of loan default as well as reasonable charges for the services of the central bank and bank lenders would be in addition to the principal to be repaid on capital credit loans to citizens. The corporations eligible would be both established and startups, and would use the money exclusively to fund viable projects to grow the economy. CHAs, as with the temporary ECHAs, would make the debt service payments with pre-tax dividends to Federal Reserve-backed commercial banks issuing the capital credit, and afterwards, upon liquidation, paid to citizen beneficiaries as regular taxable personal income.

As part of the normal money creation process, Federal Reserve policies should allow for covering reasonable and fair financing costs of the central bank and commercial banks providing interest-free capital credit loans annually and equally to EVERY citizen for the exclusive purpose of financing future capital expansion via corporations. If a corporation rejects citizen financing, they would not qualify for interest-free capital credit through the Federal Reserve/commercial banking system. Political and media pressure will help to persuade corporations to do the right thing and have ALL citizens share in our collective prosperity. 

Our government recently announced, via Treasury Secretary Steven Mnuchin, it would take ownership stakes in airlines in exchange for grants. A better solution, similar to ECHA financing, would be for each citizen, as an individual, to have an equal ownership share in the particular airline as a result of the government’s billions of dollars in grants to the airlines or any other industry to be bailed out. 

The grants or alternatively preferred government insured capital credit would finance the purchase of new or existing productive assets needed by businesses. Future earnings on the shares would pay off the grants or loans. Once the grants or loans are repaid, the money created to purchase the capital would be cancelled, avoiding both inflation and deflation. The capital itself would continue to be a source of wealth and generate consumption income for its new owners.

Capital Credit Insurance

A note about insurance: Once the economy has recovered, capital credit loans would be insured and guaranteed against loan default by private capital credit insurers, commercial risk insurers or a federal government reinsurance agency (á la the Federal Housing Administration mortgage insurance concept) –– the Capital Diffusion Reinsurance Corporation (CDRC) –– through which the loans would be guaranteed. The CDRC would reinsure any portion of any financing risk assessed as reasonable and insurable but not already insured by the commercial capital credit insurance underwriters. In establishing the CDRC, the federal government would not be undertaking a new responsibility but merely simplifying and rationalizing an existing one. This entity would fulfill the government’s responsibility for the health and prosperity of the American economy.

Such capital credit insurance would substitute for the security now demanded by lenders to cover the risk of non-payment, thus enabling the poor and others with no or few assets (the 99 percent) to overcome the collateralization barrier that excludes them from access to the means to finance their ownership of wealth-creating, income-generating productive capital. (A portion of their capital credit allotment will be used to cover the one-time cost of capital loan insurance and bank service charges.) 

Before the loan is made, the lender, risk insurance company, and other entities will first determine the “feasibility” of each particular loan. (“Feasibility” means that the enterprise’s new capital investment is expected to generate enough profits to pay for itself within a reasonable capital cost recovery period. Such a feasibility analysis will judge the soundness of the enterprise that needs to purchase the new capital assets, including the quality of its management and workforce, its current and future markets, etc.)

Self-liquidating capital credit, collateralized by capital credit insurance, is critical for stimulating the economy’s recovery and responsible growth. Insured, interest-free capital credit should be made available annually on an equal basis to ALL citizens exclusively for investment, turning today’s non-owners into economically independent owners of productive capital simultaneously with the responsible growth of the economy. This credit would finance the purchase of new or existing productive capital assets needed by businesses. Future share earnings generated by the investments would pay off the acquisition loans –– in other words, past savings or reductions of current consumption income would not be necessary to finance capital formation.

Once the commercial bank loans are repaid, the money created to form the new productive capital would be cancelled, avoiding both inflation and deflation, and continue to generate consumption income for its new owners. 

Every new productive capital increment added to the economy would generate future earnings to pay for its financing. Consequently, normal market forces would synchronize effective demand and supply for economic growth. This would continue as long as the new capital assets serve as an additional source of consumption income for today’s non-owning citizens, particularly the poor and others who do not have sufficient and secure incomes, thus reducing the need for government taxpayer redistribution and dependency on welfare, open and concealed. In this way, workers and other current non-owner citizens would help sustain economic growth and secure their own financial independence as they grow their wealth by becoming owners of the future increase in capital productiveness.

No Hoarding Or Injustice

The response to our nation’s health and economic crisis, during the epidemic and post-COVID-19, cannot be another money-making, hoarding, and capital ownership-concentrating opportunity for the already wealthy capital ownership class and Wall Street. We need honest, third-party oversight and strict protections to ensure equal opportunity of participation in the rebound and growth of our economy on the part of EVERY citizen. We need to impose strong regulation and accountability to ensure there are not no-strings-attached “stimulus” handouts for corporations and corporate executives, such as stock buybacks and executive bonuses, and stop such advantageous handouts from occurring and enhancing their personal wealth. Otherwise, millions of Americans will never escape financial peril.

Further, the insurance industry companies, who receive a federal government bailout, must not be permitted to raise premiums on Americans due to the effects of the COVID-19 outbreak on private employer-based healthcare plans.

We must stop the Federal Reserve from preemptively monetizing unproductive debt, including bailouts of banks “too big to fail” and Wall Street derivatives speculators, and billionaire private investors, and begin creating an asset-backed currency that could enable every child, woman, and man to establish a super-IRA or asset tax-sheltered Capital Homestead Account at their local bank to purposely acquire a growing dividend-bearing stock portfolio to supplement their incomes from work and all other sources of income.

We must also ensure that any corporation that benefits from emergency aid does not lay off workers, pays workers a livable wage, finances growth by issuing and selling new shares and does not rip-off consumers. 

Citizen-Owned Federal Reserve

One feasible way to significantly broaden capital ownership simultaneously with the responsible growth of the economy is to lift ownership-concentrating Federal Reserve System credit barriers and other institutional barriers that have historically separated owners from non-owners and link tax and monetary reforms to the goal of expanded capital ownership. Removing barriers that inhibit or prevent ordinary people from purchasing capital that pays for itself out of its own future earnings is paramount as an actionable policy. This can be done under the existing legal powers of each of the 12 Federal Reserve regional banks, and will not add to the already unsustainable debt of the federal government or raise taxes on ordinary taxpayers.

The Federal Reserve Board is already empowered under Section 13 of the Federal Reserve Act to reform monetary policy to discourage non-productive uses of credit, to encourage accelerated rates of private sector growth, and to promote widespread individual access to productive credit as a fundamental right of citizenship. The Federal Reserve Board needs to re-activate its discount mechanism to encourage private sector growth linked to universal capital ownership opportunities for ALLl Americans.

The Federal Reserve, which has been largely responsible for the powerlessness of most American citizens, should set an example for all the central banks in the world. Members of the Federal Reserve need to wake up and implement Section 13, Paragraph 2, which directs the Federal Reserve to create credit for local banks to make loans to finance economic growth. We should not destroy the Federal Reserve or make it a political extension of the Treasury Department, but instead reform it. The Federal Reserve no longer should be controlled by government. Instead, the American citizens in each of the 12 Federal Reserve Regions should become the owners and regulate the monetization process. The result will be that money power will flow from the bottom up, not from the top down, not for consumer credit, not for credit that doesn’t pay for itself or non-productive uses of credit, but for credit for productive uses to expand the economy’s rate of socially responsible and environmentally enhanced growth. 

By implementing Section 13 of the Federal Reserve Act the central bank can be used as a means to make every American a productive capital owner, serving as the only alternative to the two twin oligarchies of capitalism and socialism.

Further Economic Measures

Further economic measures will be needed to address the recession and recovery. 

To meet the full costs of the government and start paying down its debt, a single tax rate should be imposed for all incomes from all sources above personal and family exemption levels so that the budget could be balanced automatically and even allow the government to pay off the growing unsustainable long-term national debt. The exemption should be sufficient to meet each citizen’s or family’s common domestic needs. The poor would pay the first dollar over their exemption levels as would the hedge fund operator and others now earning billions of dollars from capital gains, dividends, rents and other property incomes which under some tax proposals would be exempted from any taxes. Other personal taxes, such as payroll taxes, should be phased out. Remove all tax loopholes to eliminate corporate and personal tax avoidance, and business subsidies. Pay out of general revenues for all promises for Social Security, Medicare, government pensions, health, education, rent and subsistence vouchers for the poor until their new jobs and ownership accumulations provide new incomes to substitute for the taxpayer dollars to fill these needs.

To encourage full payout of corporate pre-tax earnings and finance new capital formation through the issuance and sale of new shares, dividends should be tax-deductible at the corporate level, enabling corporations to reduce their tax liability to zero. Dividends should be taxed as personal consumption incomes, except when used to pay for “qualified” shares (i.e., shares meeting required standards) held within each citizen’s tax-sheltered trust account. To pressure corporations to finance their growth, other than with retained earnings and corporation debt (neither of which creates any new owners), and pay out their full earnings as dividends to their actual owners, the corporate tax rate should be raised to at least 90 percent. 

Leadership And Resolve

To overcome the COVID-19 coronavirus pandemic threatening our lives and our economy will require leadership, resolve, scientific knowledge, planning and resources. We must adopt laws promoting major reforms in monetary policy, central banking, tax and other laws for establishing a sustainable, resilient and just economy. Through a new visionary political and economic paradigm, we can build for EVERY person a more environmentally sound and sustainable economy that secures and enhances our personal futures, with preparedness to deal with future crises. 

One sign of hope is the pandemic has turned millions of people into good neighbors with a sense of realization that we are all interdependent on each other. Hopefully that can translate to reforming the system so that ownership and power concentration can be reversed with EVERY child, woman, and man having the right to property and equal opportunity access to the means of acquiring and possessing property to enhance the economic security, safety, and well-being of ALL. This will ensure inclusive prosperity and economic justice as our nation progresses into the future in harmony with all the people on Earth.

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Note: Some of the opinions expressed in this article are mine and not CESJ’s. Dawn Brohawn, Michael D. Greaney, and other CESJ colleagues contributed to this article.

Gary Reber is the founder and Executive Director of For Economic Justice (www.foreconomicjustice.org), a critic of economic policy and economic inequality, and an advocate and author for economic justice through broadened ownership of wealth-creating, income-producing physical productive capital. Mr. Reber is a board member of the Center for Economic and Social Justice (CESJ) and a founding member of the Coalition for Capital Homesteading. In 1967, Mr. Reber founded with binary economist, ESOP inventor, financial lawyer and universal citizen ownership theorist Louis O. Kelso, Agenda 2000 Incorporated to advocate policies and programs to broaden productive capital ownership in urban and economic development projects.

Appendix

Immediate Action Recommendations

The following assembled recommendations have been proposed, including the allocation of trillions of dollars in emergency stimulus in response to the COVID-19 coronavirus pandemic:

1. Substantially Increase Our Healthcare Capacity

• Nationwide stay at home and physical distancing orders are necessary to stem the spread of COVID-19.

• Use the Defense Production Act to mobilize resources to scale up production of critical supplies and personal protective equipment (PPE) in short supply, such as N95 face masks, shields, gowns, gloves and lifesaving ventilators necessary to protect healthcare workers.

• Prioritize free serological and diagnostic testing availability to every person. Greatly increase the availability of test kits for the coronavirus and the speed at which the tests are performed and processed. Put in place a verification system.

• Employ investigative contact tracing to determine whom around those that have contracted the disease might also have been exposed. 

• To the extent necessary, call upon the emergency response capabilities of the National Guard, the Army Corp of Engineers and other military armed forces to build temporary mobile hospitals and testing facilities and reopen hospitals that have been shut down to fortify at-risk areas.

• Immediately satisfy all needs for ICU hospital bed units equipped with ventilators.

• Increase provider capacity to rectify the understaffing of doctors and nurses.

• Accelerate the development of life-saving anti-viral vaccines, medications and treatments, and FDA approval. 

• Expand partnerships and work with global leaders in medicine to develop COVID-19 cures and treatments.

• Provide every person access to interactive online and real person telephone advice. 

2. Hazard Pay

• All essential and frontline workers should receive hazard pay during the epidemic.

3. Paid Medical Leave

• A 14-day paid medical leave until vaccines for the coronavirus are generally available, eligible for:

– Those tested with virus

– Those with symptoms

– All those parents of K-8 students forced to remain home due to school closures

• The 14-day paid leave should be renewable by each state legislatures’ decision since the economic impact, nor the recovery from the virus, will not occur evenly across all states.

4. Company Reimbursement for Paid Medical Leave

• Anyone who is sick or who needs to stay home should be able to stay home during this emergency and receive their paycheck. At a time when half of our people are living paycheck to paycheck and must go to work in order to take care of their family, we do not want to see people going to work who are sick and can spread the COVID-19 disease. This is especially important for hourly workers who may not have any or sufficient paid sick days to avoid coming into work when feeling ill. (In Denmark and the United Kingdom, the government is covering 75 to 90 percent of all worker salaries and wages over the next three months, provided the companies refrain from layoffs.)

• Paid Medical Leave costs should be reimbursed by the federal government to companies with fewer than 500 employees. Reimbursement by tax credits for companies with more than 50 employees; and by means of direct subsidy payments for companies with fewer than 50.

       • 50 percent reimbursement should be made to companies with more than 500 employees by means of tax credits provided the company shows a full restoration of jobs for those laid off within a year of the development of a vaccine for the virus. 

• Paid leave shall not result in a reduction of paid sick leave provisions already provided by a company or by union contracts, which would otherwise remain accrued to workers.

5. Hospital Testing And Related Costs

• Costs for hospital-clinic-doctor office entry and testing should be billed by the health provider directly to the government, not paid by the patient and then reimbursed.

• Provider costs associated with the visit for testing (i.e. labs, emergency or other room charges, outpatient, inpatient, etc.) should similarly be billed by the provider to the government.

• Return or follow-up visits if needed should be billed directly as well.

• Pharmacy and drug costs should be waived for patients determined to be infected by the virus, and all their immediate dependents under age 21, or on Medicare, Medicaid, or otherwise uninsured.

6. Health Insurance Companies Responsibility

• If an employee is insured and on medical leave, or if otherwise laid off due to the economic effects of the COVID-19 virus on their company of primary employment, the health insurance provider should waive the worker’s share of monthly health insurance premium. This should apply as well as for their immediate dependents covered by the company’s insurance benefits program.

• If an employee is insured, or if otherwise unemployed due to the economic effects of the COVID-19 virus on their company or primary employment, the health benefits insurance provider should waive all deductibles and co-pays for services for those determined infected or on leave due to school shutdowns. This should apply as well as for their immediate dependents covered by the company’s insurance benefits program.

• Premiums, deductibles, copays and coverage should remain frozen until the state legislature declares safety is restored and the COVID-19 virus epidemic is over.

• Adopt Universal Healthcare as a single-payer system.

• Until the adoption of a single-payer healthcare system, state legislatures should review all insurance company requests to raise rates after the coronavirus epidemic is over for the next three years. Attempts to recoup costs during the coronavirus period by accelerating price increases or reducing coverage should be denied if greater than the rise in the local consumer price index for the urban region.

7. Medicare And Medicaid

• The Centers for Medicare and Medicaid Services should receive all the federal funding necessary to ensure universal emergency healthcare coverage for all, regardless of income or immigration status, and cover, regardless of existing coverage or no coverage, all healthcare treatment for free, including COVID-19 testing, treatment, and eventual vaccinations.

• For those employed while receiving Medicare coverage, the monthly Medicare deductible payment should be waived until the vaccine for the COVID-19 disease is made available.

• For those employed while receiving Medicaid, all doctor or hospital costs to the employee or unemployed should be paid for by the state’s Medicaid authority. All doctors and hospitals should be required by law to accept Medicaid patients until the vaccine for the virus is made available. 

• Refusal by doctors, hospitals or clinics to accept Medicare or Medicaid patients should result in fines levied on the health provider’s annual federal tax payment. 

8. No Hunger –– Food Provisioning And Delivery System

• Emergency food programs must be supported with supplies and food stocks and people to work at food pantries. 

• Seniors, people with disabilities, and families with children must have access to nutritious food. That means expanding the Meals on Wheels program, the school meals programs, and the Supplemental Nutrition Assistance Program (SNAP) so that no one goes hungry during this crisis and everyone who cannot leave their home can receive nutritious meals delivered directly to where they live.

• K-8 students who were receiving meals while in attendance at their school, but are not so doing due to school shutdown, should continue to have meals delivered to their primary residence daily. State programs providing “meals on wheels” for elderly residents or similar programs should be expanded to cover K-8 students.

• All former cuts to the SNAP (food stamp) program since January 2017 should be restored for all those eligible on paid medical leave, leave from work due to school shutdowns, receiving unemployment benefit payments, or on Medicare or Medicaid.

• Federal and state governments should undertake whatever measures necessary to ensure the physical delivery of food to local grocery outlets, and to remove bottlenecks to online ordering and delivery of food and necessary household items to residents or local distribution centers, including if necessary mobilization of state National Guard units and requisitioning temporarily of private delivery company facilities and equipment.

9. Farmer Protections

• Suspend all Farm Service Agency loan payments to protect farmers during this crisis, extend crop insurance and emergency loans to all affected farmers, extend rural development loans, and expand the Emergency Food Assistance Program (TEFAP) to both help alleviate hunger throughout the country and support our farmers during this crisis.

• Pay for farmer food surpluses to be distributed to charity food banks.

10. Food Protections

• Protect our food supply chain and keep it running.

• Create safety guidelines about screening food industry employees for COVID-19.

• Require the use of employee physical distancing and face masks at food supply chain facilities. 

• Institute protocols for when employees test positive.

11. Food Supply Chain Reorganization

• Reorganize food supply packaging and distribution to make for more practical consumption.

12. Moratoriums During Pandemic

• There should be moratoriums on evictions, foreclosures, and utility shut-offs, as well as suspensions of payment on mortgage loans for primary residences (mortgages and rents) and utility bills. Otherwise, the outlook for foreclosures could be in double-digit millions.

• No one should lose their home during this crisis and everyone must have access to clean water, electricity, heat and air conditioning. And we must restore utility services to any customers who have had their utilities shut off. 

13. Small- And Medium-Sized Businesses

• The federal government needs to work with and aid affected businesses to provide direct payroll costs for small- and medium-sized businesses to keep workers employed until this crisis has passed. Otherwise, businesses might not survive long enough to benefit from disaster relief.

14. Employment Guarantees

• Employers should be required to restore workers on paid medical leave, who return, and to their former position, pay and benefits.

• All other benefits should continue to accrue for workers while on paid medical leave.

15. Expand Unemployment Insurance

• Emergency unemployment assistance should be provided to anyone who loses their job through no fault of their own at 100 percent of their prior salary or wages with a cap of $75,000 a year.

16. Unemployment Benefits

• The federal government should immediately extend unemployment benefits for all layoffs for an additional six months (one-year total), effective as of March 1, 2020.

• Companies should be required to continue to pay unemployment benefits taxes to their states for laid off workers for up to a year, commencing March 1, 2020.

• There should be no suspension of the Social Security 6.2 percent payroll tax or Medicare 1.45 percent tax by companies.

17. General Company Requirements

• For the duration of the COVID-19 coronavirus crisis period, companies should be required to continue to pay their employees’ health insurance monthly premiums if laid off, for a period of six months from date of initial lay off.

• Banks should be required to provide lending to business customers at interest rates no greater than the original loan, if extended; or for the initial loan, no more than the average rate for the local urban area in which the company is located.

• Banks and mortgage companies should institute immediately a moratorium on mortgage payments for those on paid medical leave, or for those laid off for economic reasons associated with the virus effect on their company for a period of three months or until returning to work, whichever is sooner.

• Auto companies’ financial services, credit unions auto financing, and other sources of financing of vehicles should introduce a moratorium on monthly auto loan payments for those on medical leave, or for those laid off for economic reasons associated with the virus effect on their company for a period of three months or until returning to work, whichever is sooner.

18. Student Loan Waivers 

• Waive all student loan payments for the duration of the emergency. Post epidemic, zero-interest should be applied to the balance due on all student loans.

19. School Districts

• School districts that shut down should continue to receive per pupil reimbursement from their states on the same schedule as when students were attending sessions.

20. State and Local Government Aid

• Provide financial aid to state and local governments to fight the pandemic.

21. Useless Regulations and Laws

• A careful review of laws and regulation at federal, state, and local levels should be conducted to determine which regulations could be lifted or eliminated without jeopardizing public health or safety. 

22. Price-Gouging

• Price-gouging must not be allowed and as soon as the COVID-19 coronavirus vaccine is developed it should be provided free to EVREY citizen. As well, all prescription drugs developed with taxpayer dollars should be sold at a reasonable price.

• As the epidemic rapidly expands, already the cost of a ventilator has soared from $25,000 to $45,000 because of increased demand and nationwide shortage.

The above represent various proposals that have been put forward for the initial phase of immediate fiscal spending response to prevent the collapse of the economy and to restore incomes now being devastated. Other proposals will certainly surface for consideration. The cost to implement will be enormous, but will save many more lives as long-term reforms such as the Capital Homestead Act start financing the rebuilding of the economy and generating capital ownership incomes for EVERY citizen-owner. 

The Current Stimulus

Congress has negotiated and enacted the Coronavirus Aid, Relief, and Economic Security (CARES) Act, an initial sweeping $2.3 trillion economic stabilization bill (“Phase III”) (See https://www.congress.gov/bill/116th-congress/house-bill/748/text). 

Among the deal’s key provisions, besides the billions of dollars in bailouts allocated to the controlling owners of major corporations to be leveraged into trillions of dollars with as few strings attached as possible, are:

• The plan will rush financial assistance to Americans with direct checks to households in the middle class and in lower-income levels. The estimated $560 billion amounts to a one-time, means-tested $1,200 payment to most American adults, among other payments. 

• An extended unemployment insurance program for laid-off workers that will allow for four months disbursements, rather than the usual three months for most. It also will raise the maximum unemployment insurance benefit by $600 per week on top of whatever base amount a worker receives from their state. It will apply to traditional workers for small and large businesses as well as those who are self-employed and workers in the gig economy.

• With the CARES Act, the government and taxpayers will now pick up the tab for the unemployment benefits for the millions of contract and gig workers that the system has failed to cover. Companies have been allowed to avoid paying any unemployment benefits tax that would otherwise cover contract and gig workers.

• More than $153 billion for the public healthcare system, including funding for hospitals, research, treatment and the Strategic National Stockpile to raise supplies of ventilators, N95 face masks, shield, gowns and other equipment. Of that, $100 billion will go to hospitals and the health system and $1 billion to the Indian Health Service.

• $340 billion to state and local governments to address spending shortages related to the coronavirus pandemic.

• $366 billion for small businesses impacted by the pandemic in the form of forgivable SBA Paycheck Protection Program (PPP) loans up to $10 million each to cover payroll and some other costs. An additional $310 billion was approved April 24 as part of an interim $484 relief package, which includes $60 billion specifically for federally insured community banks and credit unions. Businesses that retain their pre-crisis payroll for workers will have these loans forgiven. Unfortunately, as with the first PPP round, millions of small and family-owned businesses, desperate for credit and tottering on the brink of permanent closures, have been shut out from applying for, let alone receiving, the government-backed forgivable loans.

• Up to $10,000 in grants per company in immediate operating cost relief for small businesses.

• The Economic Injury Disaster Loan program provides qualifying small businesses and non-profits with working capital up to $2 million with low interest rates and terms extending up to 30 years.

• $58 billion is allocated to help airlines cover employee wages, salaries and benefits divided up as up to $25 billion for passenger air carriers, up to $4 billion for cargo air carriers, and up to $3 billion for airline contractors.

• $500 billion for big corporations in loans and grants, which are required to be paid back and subject to public disclosures and other requirements. Any corporation receiving a loan under the program is barred from making stock buybacks for the term of the loan plus one year. All loans, their terms and any investments or other assistance provided by the federal government must be publicly disclosed.

The $500 billion is in addition to the $6 trillion the Federal Reserve thus far has poured into the bankers (investment banks, equity firms, hedge funds, mutual funds, etc.) and as well non-bank corporations –– all of which further subsidizes and enriches the wealthy capital ownership class. 

The Federal Reserve is effectively engaged in unlimited “emergency” quantitative easing (new money creation), in which the national debt, will swell to over $30 trillion, with United States Treasury securities that never are paid off but extended from year to year. That said, the interest rate must be paid.

A Federal Reserve that is citizen-owned and governed could fund viable growth projects to stimulate the economy’s resurgence and capital productivity that is broadly owned EVERY citizen.

The CARES Act creates a special inspector general and a special committee to oversee pandemic recovery and provide oversight of all loans and other uses of taxpayer dollars.

Once the full bill is publicly scrutinized, there are certain to be numerous provisions accruing to the benefit of the already wealthy capital asset ownership class, the businesses they own, and Wall Street speculators.

According to the Joint Committee On Taxation (JCT), millionaires and billionaires are set to reap more than 80 percent of the benefits from a change to the tax law Republicans put in the economic relief CARES Act. The change, which suspends a restriction introduced in the 2017 tax bill, alters what certain business owners (known as pass-through entities) are allowed to deduct from their taxes. The suspension will allow some of the nation’s wealthiest to avoid nearly $82 billion of tax liability in 2020. Nearly 82 percent of the benefits from the tax law change will go to people making $1 million or more annually in 2020. Overall, 95 percent of individuals who benefit from the change make $200,000 or more annually. Because of the suspension, the JCT estimates 43,000 people making $1 million or more would owe a total of $70.3 billion less in taxes in 2020.

Is what is known to benefit ordinary Americans enough? Hardly.

As part of the April 24 interim $484 billion funding bill that provides an additional $320 billion for forgivable SBA Paycheck Protection Program (PPP) loans, the package includes $75 billion for hospitals and $25 billion for COVID-19 testing. A further provision establishes a new committee on virus oversight. 

The next “Phase IV” of the coronavirus response, “CARES 2”, could be priced at another $2+ trillion and may or may not include sweeping job-creating public works infrastructure improvements. Should infrastructure legislation pass, provisions should include the requirement that companies bidding and awarded construction contracts be broadly owned, including ALL employees.

On April 14, Rep. Tim Ryan and Rep. Ro Khanna introduced the Emergency Money for the People Act, under which every citizen 16 years old or older –– and make less than $130,000 a year –– would receive $2,000 per month cash payments from the federal government for at least six months and until unemployment falls to pre-pandemic levels. In addition to the $2,000 payments to adults, qualifying families would receive $500 for each child.

The U.S. Department of Agriculture (USDA) has announced it will purchase crops and livestock from farmers and ranchers facing a steep decline in orders and massive supply chain disruption. Funding will come from the $2.3 trillion CARES Act economic relief bill and separate USDA funds to support commodity prices.

USDA will offer $16 billion in direct grants to farmers and ranchers to compensate for short-term drops in demand and oversupply driven by the pandemic. The department will also purchase $3 billion in fresh produce, dairy, and meat to distribute to food banks, community organizations, and other service non-profits.

On April 17, Rep. Ilhan Omar unveiled legislation that would cancel all rent and home mortgage payments for the duration of the coronavirus pandemic.

On May 12, House Democrats released a $3-trillion proposal known as the Health and Economic Recovery Omnibus Emergency Solutions Act, or HEROES Act. The legislation would provide payments to local governments and another round of $1,200 checks to individuals to help them weather the impact of the coronavirus, among other measures. Subsequently, Senate Republicans have flatly rejected the proposal.

Now that the initial CARES package has expired along with the $600-a-week unemployment benefit, follow-up legislation will likely reduce the unemployment benefit and other support. If Congress fails to act responsibility, millions of American will risk homelessness and financial disaster.

Note: An earlier version of this article is published in OpEd News at https://www.opednews.com/articles/Stimulus-Mobilization-And-by-Gary-Reber-Banks_Capitalism_Capitalism-Failures_Coronavirus-200521-390.html