By Rick Osborne

90% Lack the Opportunity

Consider the following FACTS. On average, the American economy grows at the rate of $4,000,000,000,000 (yes that’s 4 trillion dollars) annually. That translates into about $12,000 for every man, woman, and child in America. But generally speaking, the beneficiaries of this annual growth are currently limited to those people who can afford to buy the stocks, bonds, real estate, and technological developments that account for this growth.

More specifically we’re talking about less than 10% of Americans who have the means to take advantage of this relatively predictable growth, and 90% who lack the opportunity to participate. Thus, we now have a 21st century wealth gap that is wider and more toxic than any time since the stock market crash of 1929 and the Great Depression which followed in its wake.

To make matters worse, this was the case long before the current pandemic oriented economic crisis raised its ugly head. In response to millions of workers losing their incomes and healthcare due to the virus, the Federal government has increased unemployment benefits for several months, and issued so called “stimulus checks ($1,200)” to millions of people in an effort to artificially jump-start demand and to prevent the ship of state from sinking into oblivion.

Unpalatable But Necessary Steps

In taking these unpalatable but necessary steps the government has significantly increased the already massive debt load, which means it’s a short-term not a long-term solution. The hope of course is to artificially resuscitate demand, which in turn should recreate jobs and get we the people back to work and lead us all back to where we were before the virus struck.

The problem is that, even before the virus struck, we the people were not in a very good place. Even before the virus erupted over half of all Americans were living paycheck to paycheck, unable to afford a $500 bump in the road without having to borrow money in order to pay for it. Things are dramatically worse than they were several months ago before the virus. But the place we were is still not the place to which we the people are longing to return. So, what can we do?

The $4 Trillion Dollar Idea That Creates No Debt!

In that light let’s recall that on average, the American economy grows at the rate of $4 trillion dollars annually. Once again, that translates into about $12,000 annually for every man, woman, and child in America. But the beneficiaries of this annual growth are those who can afford to buy stocks, bonds real estate, and new technology. This generally excludes we the people.

The question I want to raise here is, how can we make sure the average American has systematic access to the ownership side of the economy, where MOST OF THE WEALTH IS BEING GENERATED? How can the average Joe gain access to that $4 trillion dollars of predictable growth in order to generate a second stream of investment income, while eliminating the fear and instability that so many Americans suffer from in today’s incredibly imbalanced economy?

Consider the Following Possibility…

• What if the Federal Reserve, through local banks

• issued $12,000 of FULLY INSURED CAPITAL CREDIT LOANS

• to every American citizen (man, woman, and child) annually

• at 0% interest, and…

• allowed the loan to be repaid via future, pre-tax earnings/dividends (not from savings)

• along with a stipulation that these funds could only be used to purchase shares of new and transferred capital assets that were predicted to generate enough future profits to pay for their purchase and to create predictable, stabilizing, residual incomes for their owners?

This strategy, known as “Capital Homesteading,” would cost American taxpayers NOTHING. It creates NO GEVERNMENT DEBT! It creates NO CONSUMER DEBT! And, rather than government debt-backed currency, the purchase would be backed (collateralized) by real, productive, private-sector assets

And it WOULD NOT BE INFLATIONARY. All money created would be instantly backed (collateralized) by the full value of private sector assets that citizens would receive insured loans in order to purchase. Citizens would actually be purchasing newly issued, full dividend payout, voting shares of companies that need new capital assets in order to grow.

What Capital Homesteading Will Do Is…

• Give every American systematic access to the ownership side of the American economy, where most of our nations’ wealth is being generated.

• Create a residual stream of income for all Americans thru ownership – not thru labor

• END AMERICAN POVERTY,

• Stabilize family life,

• Minimize the mental illness known as GREED that so poisons American culture

• In the long run it will help to democratize the free market,

Over time, each American citizen will accumulate more equity, more residual income, and benefit from their investment income in a way that only the wealthy can today. As the result, the need for federally backed social safety net programs (i.e. social security, Medicare, Medicaid, food stamps) will gradually fade into the sunset. More people will be able to pay taxes, which in turn decreases the burden on those among us who still pay taxes. It systematically counteracts concentrated wealth/greed as it gradually democratizes America’s free-market economy!

Yet This Free Market, Non-Socialistic Solution is Being Totally Ignored!!!

If the Obama administration (or any of its predecessors) had implemented Capital Homesteading, today’s COVOD 19/Unemployment crisis would not be a crisis. We the people could afford stay at home and still have sufficient income to weather a much less severe storm. Yet we’re less than 100 days from the next Presidential election and Capital Homesteading has been totally ignored by Trump, Biden, Sanders, Warren, Booker, Harris, Klobuchar, Mayor Pete, etc. WHY?

Capital Homesteading In Detail

I confess, this commentary has been a generalized portrait in dire need of more detail. So, for a full and detailed explanation of how this strategy could be implemented, go to CESJ.ORG and check out the concept that Dr. Norman Kurland calls the CAPITAL HOMESTEADING ACT. It’s an ingenious idea whose time is long overdue. And it’s one very good thing that could actually come to fruition as the result of this horrific, COVID 19 crisis.

Addendum…

UBI vs. Capital Homesteading Comparison

Stimulus checks are effectively a short-term form of Universal Basic Income (UBI), an idea which has been advocated by among others, former presidential hopeful and serial entrepreneur Andrew Yang, as well as Mark Zuckerberg of Facebook, and Elon Musk of Tesla. Although the suggested annual amount of money issued ($12,000 annually) is the same as Capital Homesteading, that’s where the similarity ends. Check out the differences.

1. Since it issues insured capital credit loans that are paid back via pre-tax future earnings, and can only be used to buy wealth producing capital assets, Capital Homesteading creates NO GOVERNMENT DEBT and NO COMSUMER DEBT! UBI and stimulus checks create government debt that will eventually be paid back by we the people (not the 1% who are spectacular at avoiding taxes) in the form of higher taxes.
2. Capital Homesteading systematically creates universal capital ownership opportunity and access to the means of acquiring wealth producing capital assets. UBI does not.
3. Capital Homesteading systematically finances predictable and sustainable growth of the economy. UBI does not.
4. Capital Homesteading systematically enables individual citizens to become economically empowered and liberated through capital ownership. UBI does not.
5. Capital Homesteading systematically enables citizens to become economically independent of the government. UBI does not.
6. Capital Homesteading systematically generates mass purchasing power through ever-broadening citizen ownership of income producing capital. UBI does not.
7. Capital Homesteading systematically creates new owners of advanced technologies and green growth assets UBI does not.
8. Capital Homesteading systematically creates a growing tax base to pay the costs of government, thereby eliminating deficit spending and eventually paying off the currently massive government debt. UBI does not.
9. UBI/Stimulus checks are simple and immediate. That’s their strength.
10. Capital Homesteading requires some time (usually a number of years) in order for benefits to accumulate. That’s why UBI should start immediately and be phased out over time in favor of Capital Homesteading.

Rick Osbourne is a former public school teacher who has spent the past 20 years of his life writing for a living. His primary interests include politics (he’s an independent), psychology (in particular Dr. Erich Fromm), economics (in particular Binary Economics/Capital Homesteading), and childhood obesity prevention (www.pullyourownweight.org). He’s married and resides in Naperville, IL with his wife of almost 48 years, Pamela. He can be reached via email at osbourne.rick@gmail.comArticle

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