On January 30, 2013, Brad Plumer writes on Ezra Klein’s Wonkblog in The Washington Post:
On Wednesday, the government announced that the economy had shrunk at a 0.1 percent annual pace between October and December. That came as a surprise to most economists, who were expecting at least modest growth. So what happened?
Less spending from the Pentagon, for one. Government defense expenditures plunged by a staggering 22.2 percent between October and December. According to the Bureau of Economic Analysis, the Pentagon spent significantly less on just about everything except military pay. Had the Pentagon not cut back on spending, the economy would have grown at a weak but positive 1.27 percent pace.
Just think about it. With government defense spending and the make-work associated with the military-industrial complex, the economy would have grown AT A PUNY 1.27 percent pace! At below 10 percent growth rates there is NO WAY that the United States will ever by able to eliminate deficits and substantially pay down the national debt while maintaining social programs supported by tax extraction and further incurring national debt.
The military-industrial complex of subsidized private sector contractors and a war machine far greater than the combined military expenditures of the other countries in the world is a primary reason the American economy is chugging along, even at such a slow pace. Instead of over-subsidizing wasteful military expenditures we need to reform the Federal Reserve Bank to create new owners of future productive capital investment in businesses simultaneously with the growth of the economy. Such productive capital investment should be to produce REAL products and services that society needs and wants, while ensuring that through full-payout dividend income the new FUTURE owners will have income to engage in the economy as “customers with money.”
The solution to broadening private, individual ownership of America’s future capital wealth requires that the Federal Reserve 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. As well national debt needs to be focused on growing the private sector of the economy simultaneously with facilitating private, individual ownership of FUTURE productive capital formation. Policies need to insert American citizens into the low or no-interest investment money loop to enable non- and undercapitalized Americans, including the working class and poor, to build wealth and become “customers with money.” The proposed Capital Homestead Act would produce this result.
Sign the Petition at http://signon.org/sign/reform-the-federal-reserve.fb23?source=c.fb&r_by=3904687
Sign the WhiteHouse.gov petition at https://petitions.whitehouse.gov/petition/reform-federal-reserve/PhY3Jswk
Such policies will address our greatest problem, that being most Americans are not earning enough income to properly support themselves and their families. The country is experiencing a widening divide between an elite income class with well-paid salaries and dividend and capital gain income from stock ownership and low-pay wage earners and those dependent on taxpayer-supported government welfare funded by extracting taxes and incurring national debt. This situation will continue to worsen. Americans need to WAKE UP and realize that the FUTURE is one of technological unemployment. Private sector job creation in numbers that match the pool of people willing and able to work is constantly being eroded by physical productive capital’s ever increasing role. And as a result, most American incomes will decline, which will result in a downturn in the economy as there will be fewer and fewer “customers with money” to purchase the products and services society needs and wants. The result: no or significantly reduced opportunity for income.
This is the NEW REALITY! The obvious, logical solution is for people to OWN THE MACHINES and non-human means of production that result from technology.
This new reality is the result of technological innovation and invention, tectonic shifts in the technologies of production, and an obsolete union movement stuck in job creation and “more pay for less work” instead of bargaining for employee ownership and increased incomes resulting from dividends earned as stock owners in corporate America.
This can be accomplished by applying the logic of corporate finance, which is self-financing and 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.
The solution is not a focus on JOB CREATION but a focus on OWNERSHIP CREATION 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.
There is a solution. The Just Third Way Master Plan for America’s future is published at http://foreconomicjustice.org/?p=5797.
The fundamental economic solution is to create income for EVERY American by simultaneously broadening private, individual ownership of FUTURE productive capital economic growth and fully paying the profit dividends to the new American owners of the income-producing capital assets of our corporations.
Support the Capital Homestead Act at http://www.cesj.org/homestead/index.htm and http://www.cesj.org/homestead/summary-cha.htm
