Attention Recent High School and College Grads: My Generation is Offering You Two Bad Choices
If you’re a recent high school or college grad who’s about to head out into “the real world” you are being offered two bad choices. You can choose to live and work in an economy in which wealth and power are concentrated in the hands of a small segment of the private sector (a.k.a. the 1%). This choice is called capitalism and it’s historically been favored by Republicans. On the other hand, you can choose to live and work in an economy in which wealth and power are concentrated in the hands of government bureaucrats. This choice is called socialism and it’s historically been favored by Democrats.
But concentrated wealth/power in any form is toxic, and it undermines political democracy - a government of the people, by the people, and for the people. And having to choose between two bad choices feels a lot like having no choice at all. That’s one reason why political apathy is rampant in the USA today. Half the population doesn’t vote. After all, if it’s totally owned and controlled by the few with wealth and power, why bother?
Former Democratic presidential candidate Andrew Yang, along with Republican Congressman Adam Kinzinger (among others) both recognize this problem and both have formed new parties (the Forward Party/Yang and Country First/Kinzinger) in order to give voters an alternative to the bad choices they’re currently being offered. Tesla’s owner/entrepreneur/billionaire Elon Musk is rumored to be exploring similar possibilities.
The problem here is that all three are still operating on the same dualistic paradigm that fails to diffuse, de-concentrate, and spread wealth and power out into the hands of we the people. And if you fail to do that, you fail to rectify the problem of concentrated wealth and power.
There is, however, a way out of this economic quagmire. It’s known variously as Economic Democracy, Universal Basic Ownership/UBO, or Capital Homesteading. Check out the following scenario and you’ll see how to democratize the free market economy.
Simple Facts
Let’s start with these simple facts. The US Federal Reserve (our central bank) makes an annual assessment regarding how much money will be required to fund the following year’s economic growth. In 2018 for example, they concluded that 2019’s economic growth would require approximately $4 trillion dollars worth of funding.
So, where does all that money come from? Conventionally it comes from the wealthy class – those who can afford to buy the stocks, bonds, patents, copyrights, and technologies that represent this annual growth. 2019 was no exception. Most of that projected growth was funded (purchased, owned, and controlled) by fewer than 10% of Americans. Thus in 2019 wealth/ power became increasingly concentrated in the hands of a few at the expense of the many.
Now Let’s Reshuffle the Cards and Ask What If…
With those thoughts in mind, let’s look at this scenario through a different lens. If you divide $4 trillion dollars by 330 million (people in the US), you’ll find that approximately $12,000 per individual was going to be required to fund America’s economic growth in 2019.
Now, what if the Federal Reserve (as authorized by the Federal Reserve Act, section 13, paragraph 2), through local banks, had made an ANNUAL $10,000 (round numbers are easier to work with) line of credit at 0% interest, ACCESSIBLE TO EVERY AMERICAN, regardless of age, gender, race, religion, or political persuasion?
And what if these lines of credit could ONLY BE MONETIZED (turned into money) when an individual invests in (buys) qualified, income-producing capital assets (meaning the odds of these investments PAYING THEMSELVES OFF with pre-tax dividends – FUTURE EARNINGS not past savings - in 3 to 7 years are excellent)?
Finally, what if, as these annual, self-liquidating loans systematically pay themselves off, the DIVIDENDS CONTINUE TO FLOW and they become investment income for their new capital owners? What if every American becomes an economically productive member of society?
This free-market orientation to the economy, variously known as Economic Democracy, Universal Basic Ownership (UBO), or Capital Homesteading, systematically undermines the economic roots of poverty, structural racism, and war while creating no long-term consumer or government debt. In the process, it makes a political democracy possible.
So Here’s What Happens If..
According to a CPAs’ calculation, if Economic Democracy (a.k.a. Universal Basic Ownership or Capital Homesteading) was implemented at birth, an AVERAGE 18-year-old would PRODUCE over $18,000 worth of investment income and they could afford to attend college without waiting tables, flipping hamburgers, begging for grants, or going into mega debt.
At age 40 they’d PRODUCE over $50,000 of investment income without having to suck up to a boss or a time clock for fear of losing their job. And at age 65 they’d PRODUCE almost $90,000 of investment income, their capital assets/money would be working for them, and the need for social safety net programs such as Social Security, Medicare, Medicaid, etc. would gradually fade off into the sunset.
Instantly Collateralized
Notice that all transactions would be instantly collateralized the moment a purchase was made. They’d also be 100% capital credit insured. In other words, nobody – not the government or the individual investor is on the hook - even if a supposedly sound investment failed to live up to expectations. And since in this strategy production always precedes consumption, the possibility of inflation is systematically eliminated. An absolute win/win for everyone!
The democratizing potential inherent in making every American citizen an owner of income-producing capital assets means that we could eliminate the economic roots of poverty, structural racism, war, and environmental destruction, without creating any debt, while simultaneously starting to pay down the (over $30 trillion-dollar) national debt in the process.
So Why Haven’t We the People Been Exposed?
If the logic of this scenario makes so much sense, the question becomes why haven’t Americans been exposed to this concept by local newspapers, radio and TV stations, and politicians who are supposedly motivated by what’s best for we the people? The answer is, the 1% (who own and control both political parties, the Presidency, the House and Senate, state legislatures, as well as the media, the military, the courts, and the cops) own and control the message too.
Do You Really Want to Solve the Big Problem?
So, if you’re a recent high school or college graduate who suddenly finds himself/herself faced with two very bad choices, just know despite the fact that my generation has ignored Economic Democracy (Universal Basic Ownership, Capital Homestead), there is a way to rectify this very daunting problem. After all, you’re the future. I’m (at 75 years old) the past. You and your generation can beat concentrated wealth/power. You can democratize the free market economy by becoming aware of and acting on an idea whose time is long overdue.
It Always Seems Impossible Until…
Before you say it’s impossible, allow me to quote the indefatigable Nelson Mandela who once said, “It always seems impossible, UNTIL IT’S DONE.” Then Robert F. Kennedy who said “Some men see things as they are and ask why. I dream of things that never were and ask why not?” And finally, John F. Kennedy who said, “Those who make peaceful revolution impossible make violent revolution inevitable.” Let us choose the peaceful revolution.
For further details on Economic Democracy/Universal Basic Ownership see WWW.CESJ.ORG
Addendum…
UBI vs. Economic Democracy/UBO Comparison
Some people have confused Economic Democracy/Universal Basic Ownership (UBO) with Universal Basic Income (UBI), an idea that has been advocated by among others, former presidential hopeful and tech entrepreneur Andrew Yang, as well as Mark Zuckerberg of Facebook, and Elon Musk of Tesla. Although their end goals are similar, the way they arrive at those goals are dramatically different. Check out the differences.
1. Since it deals in lines of credit that are paid back via pre-tax future earnings, and can only be used to buy income-producing capital assets, Economic Democracy creates NO LONG-TERM GOVERNMENT DEBT and NO LONG-TERM CONSUMER DEBT! UBI creates 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. By assuring that production always precedes consumption, Economic Democracy systematically eliminates any possibility of inflation. UBI does not.
3. Economic Democracy systematically creates universal capital ownership opportunity and access to the means of acquiring income-producing capital assets. UBI does not.
4. Economic Democracy systematically finances predictable and sustainable growth of the economy. UBI does not.
5. Economic Democracy systematically enables individual citizens to become economically empowered and liberated through capital ownership. UBI does not.
6. Economic Democracy systematically enables citizens to become economically independent of the government. UBI does not.
7. Economic Democracy systematically generates mass purchasing power through ever-broadening citizen ownership of income-producing capital. UBI does not.
8. Economic Democracy systematically creates new owners of advanced technologies and green growth assets UBI does not.
9. Economic Democracy 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.
10. UBI is simple and immediate. That’s its strength.
11. Economic Democracy requires a little time (generally 3 to 7 years) in order for benefits to begin accumulating. That’s why UBI should start immediately and be phased out over time in favor of Economic Democracy (UBO/Capital Homesteading).