Politicians always talk about jobs. But the real issue is NOT JOBS. It’s INCOME! For example, Donald Trump, George W. Bush, and Mitt Romney (i.e. the one percent generally speaking) have never had a real job. But they have more than enough income. On the other hand, you can have multiple jobs, as many people do these days, and still be unable to pay your rent.

That said, there are two ways to generate income. You can work for a wage or a salary. Or, as the one percent has clearly demonstrated, you can simply own enough wealth-producing capital assets (stocks, bonds, land, machines, etc), collect enough in dividends, and you’ll do just fine.

Since 1980 wages and salaries - the workers’ side of the economy - has stagnated. In contrast, the ownership side of the economy has exploded so much that it’s created a huge, unprecedented plutocracy/oligarchy along with a wealth gap between the few and the many so large that it threatens what little is left of America’s claim to being a political democracy.

As proof of that pudding a recent study shows that in 1990 the United States had 66 billionaires. In 2020 we now have 614 billionaires. Furthermore, during the past four COVID dominated months billionaire wealth has grown an average of 23% while millions of workers have lost their jobs, their health insurance, and their ability to support themselves and their families.

In other words, America is in dire need of real change. The question is, what should that real change look like? That said, consider the following COLD, HARD FACTS. On average, the American economy grows at the rate of $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.

90% Lack the Opportunity

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 month 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 citizen 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-worth 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 annually (man, woman, and child)

• at 0% interest, and…

• allowed the loan to be repaid via future 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 a predictable, stabilizing, residual income for its 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 this strategy would do however, is give every American citizen access to the ownership side of the American economy, where most of our nations’ wealth is being generated. In the long run it will help democratize the free market, end poverty, stabilize family life, balance the budget, and pay off our massive and ever-growing national debt, etc.

So for example, by age10 every child would have had $120,000 invested on their behalf and paying dividends. By age 18 well over $200,000 would have been invested and be generating dividends that would easily pay for a debt-free college education.

In this moment of political division and strife Capital Homesteading literally pays all Americans to pull together, at the same time, in the same direction, towards the same goals! It translates mere political talk (such as…we’re all in this together) into real live, results driven action!

It Systematically Counteracts Concentrated Wealth/Greed!

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 load on those among us who still pay taxes. It systematically counteracts and impedes concentrated wealth/greed as it gradually democratizes America’s free-market economy!

Today’s Crisis Wouldn’t Be a Crisis

If the Obama administration, the GW Bush administration, or the Clinton administration 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. Trump has the same opportunity for over three years now and has shown no genuine interest in making America great once and for all. Joe Biden? How about you?

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.