The Economic Democracy Act: FAQ's Updated

Social IssuesLifestyle

  • Author Rick Osbourne
  • Published June 1, 2021
  • Word count 1,626
  1. Where does this $4 Trillion Dollars come from? According to a recent Federal Reserve estimate, $4 Trillion is, on average, the total amount of new productive capital and infrastructure added to the US economy each year.

  2. The real question is, how will that new capital be financed? If the wealthy use their “past savings” to pay for the new capital, they will own and control it. If the government uses tax dollars or goes further into debt to pay for the new capital, the government will own and control it. The EDA enables “we the people” (meaning every individual citizen) to have equal access to the means (money and credit) needed to pay for and own the new capital that will produce the new goods and services that we consume. The EDA empowers everyone - NOT just the few - to participate in the ownership side of the economy. SO EVERYONE CAN GENERATE INCOME FROM THE CAPITAL THEY OWN.

  3. Won’t the EDA be inflationary? No, it won’t. Inflation occurs when you have “too many dollars chasing too few (or the existing amount of) goods and services.” The EDA creates no new money for consumer purposes or government debt (as is now the case). The new money and credit that would be created by the central bank (Federal Reserve System) and commercial banks would always be backed by insurance as well as the new assets needed by businesses to produce and sell new goods and services.

  4. Isn’t the EDA socialistic? No, it’s not. Socialism aims to dilute private property rights (individual ownership), particularly in income-producing wealth. Under Socialism, “everybody (or the government) owns, so nobody owns.” Capitalism concentrates private property rights in the hands of a few at the expense of the many. In contrast, the EDA is all about private ownership. But it systematically counteracts concentrated wealth/power by expanding ownership opportunity to include everyone. It would reform our basic institutions such as the money and tax systems to democratize our free market economy. In the process it UNDERWRITES POLITICAL DEMOCRACY while taking nothing away from today’s “haves” except their virtual monopoly over future capital ownership and economic power.

  5. Won’t the EDA increase my taxes? No it won’t — and if you and your family earn less than $30,000 per adult and $20,000 per dependent, you won’t pay any federal taxes. By covering all federal government costs under a single-rate income tax, the EDA would eliminate regressive federal taxes on employers and employees, as well as sales and consumption taxes that hurt the poor. It would impose no property taxes, which discourage the acquisition of assets. It would even change estate and gift taxes to encourage the wealthy to spread out their transferred wealth to many people. What the EDA will do over time is broaden the tax base — create tens of millions of NEW TAXPAYERS who will in turn help current taxpayers shoulder the tax burden. This will actually REDUCE taxes for most people who currently pay taxes. It even offers the potential of PAYING OFF THE NATIONAL DEBT.

  6. Let’s calculate. A family of 4 would receive $48,000 (4 X $12,000) of capital credit annually. And a family of 10 would receive $120,000 (10 X $12,000) of capital credit annually. Right? So, doesn’t the Economic Democracy Act effectively pay for a couple to have lots of kids in order to get lots of money? The short answer is that since the line of credit is non-transferable, and the new capital assets and capital incomes belong to the individual, parents do not directly benefit. (Parents however, would have decision-making power over the child’s investments, until the age of adulthood.) But more importantly, research shows that as income increases childbirth frequency decreases. So, on both counts, the EDA will not encourage overpopulation.

  7. How is the Economic Democracy Act different from Universal Basic Income? In terms of the income a citizen would receive, UBI is simple and relatively immediate. That’s its strength. It’s consumer oriented and is intended to remain relatively constant in size over time. UBI may provide a SHORT-TERM boost in consumption incomes, but it requires INCOME REDISTRIBUTION and creates DEPENDENCE on government. It does nothing to enable most citizens to become economically independent owners of capital. In contrast the EDA requires a little time (5 to 7 years) before capital incomes are actually being generated by the assets that citizens acquire with their capital credit. The EDA is investment oriented, which means it enables every citizen to accumulate a growing stake of capital assets that will generate growing capital incomes throughout their lifetime. Rather than relying on more taxes and more government, the EDA provides a LONG-TERM solution that would grow a sustainable economy, limit the economic power of government, and foster an ever-growing base of ECONOMICALLY INDEPENDENT CITIZEN OWNERS.

  8. Is the Economic Democracy Act similar to an Employee Stock Ownership Plan/ESOP? Yes. But instead of covering just those who work for private sector corporations that choose to implement an ESOP, the Economic Democracy Act uses the same financing approach as the ESOP in order to COVER EVERYONE (regardless of age, gender, race, religion), most of whom lack the required means to participate in the ownership side of the American economy.

  9. Has the Economic Democracy Act been tested in a pilot project to see how it performs in real life? Yes and No. The basic mechanics of this strategy have been thoroughly tested in the roughly 8000 employee-owned companies and 11 million employee-owners that have been created over the past 50 years. As we said in the previous question, the EDA is really just an expansion of the of the ESOP strategy that aims to give all Americans an equal opportunity to participate in and to benefit from ownership of the new wealth being created in the American economy every year. However, it has yet to be formally tested in a national setting.

  10. What percentage is used in order to calculate an average ROI and payoff potential? Using very conservative estimates, we chose 15% as the PRE-TAX ROI. Historically, before the recent wild swings and grossly inflated share values of today, an AFTER-TAX ROI ran in the neighborhood of 9 to 12%. The payback period is calculated by dividing one by the rate of return and rounding up to the nearest integer. Thus 1/.15 = 6.666 (round it up to 7 years).

  11. How does Economic Democracy reduce wage slavery in the US? By giving everyone (as opposed to a few) legitimate access to the capital ownership side of the US economy (where almost all the new wealth is generated) and creating capital incomes for everyone, Economic Democracy promotes financial independence and economic empowerment. It reduces the need for anyone to sell most of the waking hours of their lives to an employer in exchange for a pay check.

  12. How will the EDA impact the bust/boom character of America’s economy? The EDA would gradually eliminate the imbalances in supply (production) and demand (consumption) in the economy, worsened by unsound monetary and tax policies, which are responsible for the bust/boom dilemma and that create the widening gap in wealth, income and power between a tiny fraction of the population and the majority of citizens.

  13. Does the EDA appeal mostly to conservatives or mostly to liberals? To be honest this is a strategy that appeals to BOTH SIDES of the aisle. It appeals to the fiscally conservative Republican who wants to rein in spending and live within our means. It also appeals to the liberal Democrat who wants a level playing field where everyone has an equal opportunity to prosper. And since it systematically promotes independence from the government (i.e. freedom), the only people who disapprove of the EDA are autocrats who want to control “we the people.”

  14. Why would the mainstream media fail to inform “we the people” about such a revolutionary economic strategy? Quite simply, the entire mainstream media (including FOX, CNN and MSNBC) is owned and controlled by the one percent. And the one percent prefers to keep “we the people” under control and in the dark about revolutionary ideas that threaten to undermine their concentrated wealthy/power. We’re allowed to see and hear what media owners allow us to see and hear. In other words, America’s mainstream media delivers little more than profitable propaganda that, in the long run, supports concentrated wealth/power.

  15. Why doesn’t academia introduce this strategy to all their future economists? To be honest, most economists have never been introduced to the ideas behind the Economic Democracy Act. They can’t teach what they don’t know. On the other hand, in the 21st century, academia is largely dependent on corporate funding (i.e. the one percent) for their existence. So even if they are familiar with the paradigm underpinning the Economic Democracy Act, academicians can ill afford to introduce this revolutionary strategy to future economists without challenging the basis of their own credentials. Bureaucrats (conventionalists) hardly ever rock the boat.

  16. Who’s the primary proponent of the Economic Democracy Act? That would be the Center for Economic and Social Justice (CESJ.ORG), headquartered in Arlington, VA. More information on the Economic Democracy Act is available at

  17. What are the three big questions that the CESJ wants to ask about any legislation that gets run through Congress? Who will own it? Who will control it? Who will pay for it? In the case of the EDA, every individual person in the USA will be able to purchase, own and control their own wealth-producing assets. The EDA will connect every citizen to a now-untapped source of asset-backed money and insured capital loans that will be repaid by the future profits of new technologies and other capital assets added by well-managed businesses each year.

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 (a Center for Economic and Social Justice/CESJ.ORG board member), and childhood obesity prevention ( He's married and resides in Naperville, IL with his wife of almost 48 years, Pamela. He can be reached via email at

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