America Is Turning Into One Big Prison For People In Debt (Demo)

By Gary Reber Uncategorized February 2, 2013

On January 29, 2013, Steve Fraser writes on AlterNet.org:

Shakespeare’s Polonius offered this classic advice to his son: “neither a borrower nor a lender be.” Many of our nation’s Founding Fathers emphatically saw it otherwise. They often lived by the maxim: always a borrower, never a lender be. As tobacco and rice planters, slave traders, and merchants, as well as land and currency speculators, they depended upon long lines of credit to finance their livelihoods and splendid ways of life. So, too, in those days, did shopkeepers, tradesmen, artisans, and farmers, as well as casual laborers and sailors. Without debt, the seedlings of a commercial economy could never have grown to maturity.

Ben Franklin, however, was wary on the subject. “Rather go to bed supperless than rise in debt” was his warning, and even now his cautionary words carry great moral weight. We worry about debt, yet we can’t live without it.

Debt remains, as it long has been, the Dr. Jekyll and Mr. Hyde of capitalism. For a small minority, it’s a blessing; for others a curse. For some the moral burden of carrying debt is a heavy one, and no one lets them forget it. For privileged others, debt bears no moral baggage at all, presents itself as an opportunity to prosper, and if things go wrong can be dumped without a qualm.Those who view debt with a smiley face as the royal road to wealth accumulation and tend to be forgiven if their default is large enough almost invariably come from the top rungs of the economic hierarchy. Then there are the rest of us, who get scolded for our impecunious ways, foreclosed upon and dispossessed, leaving behind scars that never fade away and wounds that disable our futures.

Think of this upstairs-downstairs class calculus as the politics of debt. British economist John Maynard Keynes put it like this: “If I owe you a pound, I have a problem; but if I owe you a million, the problem is yours.”

What must be made clear is that there is consumer debt, which requires a separate source of income to pay down, and productive capital credit debt, is based on the logic of corporate finance, which uses self-financing asset-backed credit for productive uses to grow the economy. People invest in capital ownership on the basis that the investment will pay for itself. This is were the government can play a significant role in providing to EVERY American the financial mechanisms to facilitate loans specifically for productive capital investment without the requirement of “past” savings. The loan debt would be paid out of “future” earnings––as is the practice of the wealthy ownership class.

Productive capital investment and thus economic growth expansion occurs when there are “customers with money” to purchase the extended products and services created. Capital formation transactions are monetized as determined by the expertise of corporate management and banks––that each transaction is viably feasible so that there is virtually no risk. What is needed is to implement financing tools and economic proposals to correct the imbalance between production and consumption at its source, and broaden ownership of productive capital in conformance with private property free market principles. Thus, setting ourselves on a path to prosperity, opportunity, and economic justice requires that we finance FUTURE productive capital growth simultaneously with creating new capitalists owners who will derive dividend income to make them good “customers with money.”

The solution is to focus on OWNERSHIP CREATION facilitated by capital credit and commercial credit insurance backed by government if necessary, whereby EVERY American can acquire private, individual ownership in FUTURE income-producing productive capital investment without the need to limit the financing to past savings and/or requiring workers to reduce their consumption incomes to become owners.

We need aggressive economic growth while simultaneously broadening private, individual ownership of FUTURE productive capital formation, enabling EVERY American to acquire via self-payment loans a viable income-producing capital estate over time, and thus pave the way for EVERY American to “retire” and “do more of what you want and less of what you don’t.”

There is a solution, which will result in double-digit economic growth and simultaneously broaden private, individual ownership so that EVERY American’s income significantly grows, providing the means to support themselves and their families with an affluent lifestyle. The Just Third Way Master Plan for America’s future is published at http://foreconomicjustice.org/?p=5797.

http://www.alternet.org/economy/america-turning-one-big-prison-people-debt

America Is Turning Into One Big Prison For People In Debt (Demo)

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