On April 8, 2013, Louise Hartman posts on the Thom Hartmann Program a piece entitled: “There Is Nothing ‘Grand’ About Obama’s ‘Grand Bargain.'”
Despite the fact that Americans want Medicare and Social Security protected, President Obama has once again included cuts to the vital programs as part of his new budget proposal. As he’s done previously, the President has offered up a change to cost of living increases – called the chained CPI – which reduces benefits paid to seniors, veterans, and the disabled.
A new report from Alternet highlights several facts that the President should consider before asking the poor to bear the brunt of more budget cuts. According to the report, half of American workers are “not at all confident” that they will be financially stable in their retirement, and only 57 percent have managed to save $25,000 or less.
Another stunning factor in these proposed cuts is the decline of pensions in our nation, which shows that over 84 thousand pensions have disappeared since 1985. And with the decline of pensions, we saw a rise in 401(k) retirement plans, however that experiment has been a complete disaster. According to Alternet, “401(k)s are volatile, complicated, expensive, and inadequate,” and they don’t provide retirement security for workers.
President Obama stated: “What’s at stake is whether this will be a country where working people can earn enough to raise a family, build a modest savings, own a home, and secure their retirement.” But the reality is that fewer and fewer Americans will be prepared for their income needs during retirement as their savings are and will continue to be meager, pension plans will be less secure and viable, and 401(k) retirement plan investments will become more risky. Why, because there is a significant paradigm shift occuring in the economy that academia, economist, and national political leaders are oblivious to. That is, tectonic shifts in the technologies of production are destroying and devaluing the worth of jobs, and replacing people with “machines” as the primary means of producing products and services needed and wanted by society.
As long as working people are limited by earning income solely through their labor worker wages, they will be left behind by the continued gravitation of economic bounty toward the top 1 percent of the people that the system is rigged to benefit. The tiny minority is the prosperous ownership class who own and control most of the productive capital wealth of the nation. Without policies to ensure that FUTURE productive capital economic growth is financed to create new owners, broadly including EVERY citizen as individual owners, working people and the middle class will continue to stagnate, resulting in a stagnated consumer economy. More troubling is that this continued stagnation will further dim the economic hopes of America’s youth, no matter what their education level, and, of course, dampen prospects for economic security in retirement. The result will have profound long-term consequences for the nation’s economic health and further limit equal earning opportunity and spread income inequality. As the need for labor decreases and the power and leverage of productive capital increases, the gap between labor workers and capital owners will increase, which will eventually result in upheaval. Thus, it is imperative that we set a corrective course to put us on the path to prosperity, opportunity, and economic justice.
In this essential respect, President Obama is failing the American people by allowing the limited financial securities present today to be siphoned off without the prospects for building stronger, more self-reliant alternative financial security. The ONLY way this can be accomplished is to create the means for viable ownership of productive capital by EVERY American and not just for the tiny elite who now own our corporations, and thus effectively the nation’s productive asset wealth.
The proposed Capital Homestead Act would make it possible for every American to become a viable owner of FUTURE productive capital. According to its architects, it would “enable every man, woman, and child to accumulate wealth and receive dividend incomes from newly issued shares in new and growing companies, without being taxed on the accumulations (including property and shares gained through inheritance, savings, and arrangements like Employee Stock Ownership Plans/ESOPs, Community Stock Ownership Plans/CSOPs, and Community Investment Corporations/CICs). In addition to serving as a source of capital credit for corporate workers, CHAs would also provide an ownership-building account for individuals who do not work for profit-making enterprises, such as school teachers, civil servants, military personnel, police, and health workers, and for individuals who have no remunerative employment, such as the disabled, the unemployed homemakers and children.”
Under the Just Third Way and Capital Homesteading more just and simple tax system, the following is proposed:
• Eliminate all tax loopholes and subsidies,
• Provide an exemption of $100,000 for a family of four to meet their ordinary living needs,
• Encourage corporations to pay out all their profits as taxable personal incomes to avoid paying corporate income taxes and to finance their growth by issuing new full dividend payout shares for broad-based citizen ownership,
• Eliminate the payroll tax on workers and their employers, but
• Pay out of general revenues for all promises for Social Security, Medicare, 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.
• The tax rate would be a single rate for all incomes from all sources above the personal exemption levels so that the budget could be balanced automatically and even allow the government to pay off the growing unsustainable long-term debt, but 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.
• As a substitute for inheritance and gift taxes, a transfer tax would be imposed on the recipients whose holdings exceeded $1 million, thus encouraging the super-rich to spread out their monopoly-sized estates to all members of their family, friends, servants and workers who helped create their fortunes, teachers, health workers, police, other public servants, military veterans, artists, the poor and the disabled.
• The Federal Reserve would stop monetizing unproductive debt, including bailouts of banks “too big to fail” and Wall Street derivatives speculators, and
• Begin creating an asset-backed currency that could enable every man, woman and child to establish a Capital Homestead Account or “CHA” (a super-IRA or asset tax-shelter for citizens) at their local bank to acquire a growing dividend-bearing stock portfolio to supplement their incomes from work and all other sources of income.
• The CHA would process an equal allocation of productive credit to every citizen exclusively for purchasing full-dividend payout shares in companies needing funds for growing the economy and private sector jobs for local, national and global markets,
• The shares would be purchased on credit wholly backed by projected “future savings” in the form of new productive capital assets as well as the future marketable goods and services produced by the newly added technology, renewable energy systems, plant, rentable space and infrastructure added to the economy.
• Risk of default on each stock acquisition loan would be covered by private sector capital credit risk insurance and reinsurance, but
• Would not require citizens to reduce their funds for consumption to purchase shares.
The end result is that citizens would become empowered as owners to meet their own consumption needs and government would become more dependent on economically independent citizens, thus reversing current global trends where all citizens will eventually become dependent for their economic well-being on our only legitimate monopoly –– the State –– and whatever elite controls the coercive powers of government.
Support the Agenda of The Just Third Way Movement at http://foreconomicjustice.org/?p=5797
Support Monetary Justice at http://capitalhomestead.org/page/monetary-justice
Support the Capital Homestead Act at http://www.cesj.org/homestead/index.htm and http://www.cesj.org/homestead/summary-cha.htm
http://www.thomhartmann.com/blog/2013/04/there-nothing-grand-about-obamas-grand-bargain
