Passing the Capital Homesteading Act would require the Federal Reserve, through local banks, to loan $12,000 annually to every single American citizen (every man, woman, and child) at ZERO PERCENT INTEREST annually. These funds could ONLY be used to purchase wealth producing capital assets (such as stocks, bonds, machinery, land, buildings, and technology) that would PREDICTABLY PRODUCE FUTURE EARNINGS in the form of dividends.

The loan would also be fully insured and designed to be paid back with pre-tax, FUTURE EARNINGS/DIVIDENDS and NOT from individual savings or placing a second mortgage on the family home. Once the loan is paid off (in 3 to 7 years) the DIVIDENDS CONTINUE to be paid out and they become passive, residual income that ELIMINATES POVERTY, stabilizes family life, creates tens of millions of new taxpayers, which in turn dilutes and lowers the tax rate for all those who still pay taxes, and in the long run it pays off the national debt. And all of this can be achieved without creating a dime of consumer or government debt.

But IF YOU MISS THE CONCEPT OF FUTURE EARNINGS, you’ll miss the revolutionary potential of this ingenious idea whose time has not only come, but is actually long overdue. It essentially gives every American access to the ownership side of the American economy which is where almost all the new wealth is being generated. And by doing so it systematically democratizes the free market, counteracts concentrated wealth/greed, and it creates an American economy in which a political democracy (a government of, by, and for the people) is actually possible. Now let’s dig into the idea of Capital Homesteading in a little more detail.

A Systematic Solution Based on Facts

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!

Now 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 now 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 single American citizen (man, woman, and child regardless of race, gender, religion, sexual orientation, or economic status) annually

• at 0% interest, and…

• allowed the loan to be repaid via FUTURE, PRE TAX EARNINGS/DIVIDENDS – NOT FROM PERSONALSAVINGS

• 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 GOVERNMENT 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 However 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 AND HEAL THE RACIAL DIVIDE

• 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,

• Create millions of new taxpayers, thereby DILUTING and REDUCING the TAX BURDEN on those who actually pay taxes

• Minimize the growing threat of artificial intelligence in Americas’ job market

• Balance the national budget,

• And pay off our massive and ever-growing national debt, etc.

One Simple Example

Here’s one simple example of how Capital Homesteading would benefit the next generation of Americans. If implemented, by age10 every child would have had $120,000 (10 times $12,000) 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 along with all the benefits that would follow in its wake. Absolutely a win/win for everyone!

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 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, Trickle-Up, 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 70 days from the next Presidential election and Capital Homesteading has been totally ignored by Trump, Biden, Harris, Sanders, Warren, Booker, 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.