On September 4, 2013, Walter Hamilton writes in the Los Angeles Times:
The 401(k) system has led to deep financial woes for a generation of American workers, leaving most people with inadequate retirement savings and dreary prospects for their latter years, according to a new research report.
The widespread adoption of 401(k) plans in the last three decades has benefited upper-income workers, providing them with a coveted tax break even as it has left them at the mercy of the volatile stock market, according to the analysis by the Economic Policy Institute, a liberal think tank.
But the 401(k) system has been a dud for the vast majority of Americans, with women, young people and minorities among the broad groups whose financial well-being is at risk because they’re not saving enough.
“Retirement insecurity has worsened for most Americans as retirement wealth has become more unequal,” the report says. “For many groups, the typical household has no savings in retirement accounts and balances are low even when focusing only on households with savings.”
Capital Homesteading is the ONLY viable solution to the economic decline of America. Its implementation requires that our leaders, academia and the national media recognize that all individuals to be adequately productive cannot do so when a tiny minority (capital owners) produce (via the productive assets they own) a major share and the vast majority (labor workers), a minor share of total output of the economy’s products and services. The system must be reformed to create a world in which the most productive factor of the FUTURE — physical capital — now owned by a handful of people — is owned by a majority — and ultimately 100 percent — of the consumers, while respecting all the constitutional and private property rights of present capital owners.
A balanced Just Third Way approach to building a FUTURE economy that supports general affluence for EVERY American is presently not in the national discussion. It appears that the President of the United States, the elected Congressional representatives and Senators, academia, and the media are oblivious to this principled solution that has the ingredients to power economic growth at double-digit GDP rates.
This goal requires investment in FUTURE wealth-creating, income-generating productive capital assets while simultaneously broadening private, individual ownership of the resulting expansion of existing large corporations and future corporations. Not only is employee ownership the norm to be sought wherever there are workers but beyond employee ownership the norm should be to create an OWNERSHIP CULTURE whereby EVERY American can benefit financially by owning a diversified SUPER IRA-TYPE Capital Homestead Account (CHA) portfolio of income-producing, full-voting, full-dividend payout securities in America’s expanding corporations and those newly created to produce the future products and services needed and wanted by society.
Those who read this and are in a position of influence should reach out to President Obama and the leadership of his Organizing for Action as well as to other political leaders, and call for them to convene a national discussion using the national media and social media, and our educational institutions, to open up a discussion on EVERY CITIZEN AN OWNER opportunity. We need fresh and inspired leaders who can educate on this issue at this time because academia, the media, and our so-called leaders are not addressing how people make money and the significance of OWNING wealth-creating, income-generating productive capital assets. We need to get people to understand that as with today, in the FUTURE we will continue to experience tectonic shifts in the technologies of production, which will destroy jobs and devalue the worth of labor. This is a crucial understanding because at present for the 99 percent of the nation a JOB is the ONLY source of income to support themselves and their families. We need political leaders who will commit to a government policy focus on OWNERSHIP CREATION, by which jobs will result and naturally follow as the economy revs up to double-digit GDP growth and fully applies technological innovation and invention to shift from unnecessary labor toil to human-intelligent machines, super-automation, robotics, and digital computerized operations.
To accomplish the goal of universal ownership, the Federal Reserve needs to stop monetizing unproductive debt, and begin creating an asset-backed currency that could enable every child, woman and man to establish a Capital Homestead Account or “CHA” at their local bank to acquire a growing dividend-bearing diversified stock portfolio to supplement their incomes from work and all other sources of income, and provide future financial security in retirement. Steadily over time this will create a robust economy with millions of “customers with money” to purchase the products and services that are needed and wanted.
We need to apply the proven principles of insurance to the financing of FUTURE wealth-creating, income-generating productive capital assets. We need to empower individuals to acquire multiple company diversification ownership facilitated with private capital credit insurance or a government reinsurance agency (ala the Federal Housing Administration concept). The promissory note can be offset to the government’s central Federal Reserve Bank in return for the cash equivalent of the amount of the loan, less an administrative fee. The only cost to the direct lending bank in making a loan to the corporation would be the administrative fee, or about 2 percent of the loan’s principal and then another 2 percent for capital credit insurance, with an additional quarter of a percent paid to the Federal Reserve Bank to monetize the loan and give the lender the same cash as it would have had if it had actually loaned money to the corporation. The lender’s cash loaned to the company’s Employee Stock Ownership Plan (ESOP) trust and/or the individual Capital Homestead Account or “CHA” (a SUPER-IRA or asset tax-shelter for citizens) is replenished with the Federal Reserve Bank cash. When the company pays the ESOP trust or CHA enough money to enable the trust(s) to repay the lender, the lender has to retrieve the note and pay back the Federal Reserve Bank. Thus, the loan cost would be essentially not more than 5 percent to allow ownership broadening financial capital to be invested in ownership broadening ESOP and CHA trusts to create new capitalists. As such, national capital credit insurance replaces the requirement for pledging past savings and security (which for the most part most Americans do not have).
Our leaders need to put on the table for national discussion this SUPER-IRA idea and the necessary reform of our tax policies that would incentivize corporations to pay out fully their earnings in the form of dividend income and issue and sell new stock to grow, instead of financing with “retained earnings” and borrowing, which further concentrates ownership among the people who now are the corporate owners. 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” (earnings) in the form of new productive capital assets with future marketable products and services produced by the newly added technology, renewable energy systems, plant, rentable space and infrastructure added to the economy.
As noted above, risk of default on each stock acquisition loan would be covered by private sector capital credit risk insurance and reinsurance (ala the Federal Housing Administration concept), but would not require citizens to reduce their funds for consumption to purchase shares.
For solutions see “The Solution To America’s Economic Decline” at http://www.nationofchange.org/solution-america-s-economic-decline-1367588690 and “Education Is Critical To Our Future Societal Development” at http://www.nationofchange.org/education-critical-our-future-societal-development-1373556479.
Also see “Financing Economic Growth With ‘FUTURE SAVINGS’: Solutions To Protect America From Economic Decline” at NationOfChange.org http://www.nationofchange.org/financing-future-economic-growth-future-savings-solutions-protect-america-economic-decline-137450624 and “The Income Solution To Slow Private Sector Job Growth” at http://www.nationofchange.org/income-solution-slow-private-sector-job-growth-1378041490.
