Last Thursday we looked at how cutting consumption to accumulate savings, far from being the only way to finance new capital formation, actually throws the entire financial and economic system into a cocked hat and causes a failure of Say’s Law of Markets to operate . . . although why the hat has to be cocked instead of a gun remains a mystery. Either does the damage.
|"C'm on, Uncle Milty, let my law work!"|
We closed by noting that there is a way to finance new capital formation so that greed need no longer be perceived as somehow “good,” despite the gospel of greed spread by Milton Friedman and others, and Say’s Law work again so that production and consumption will be in balance.
And that way is . . . ?
Removing barriers that inhibit or prevent ordinary people from purchasing capital that pays for itself out of its own future earnings. It’s called “Capital Homesteading”:
Capital Homestead Act Summary
|"But...but...but...you need inflation to have full employment!"|
The Capital Homestead Act is a comprehensive national economic strategy for empowering every American citizen, including the poorest of the poor, with the means to acquire, control and enjoy the fruits of productive corporate assets.
This long-range agenda involves major restructuring of our tax system and our Federal Reserve policies to lift unjust artificial barriers to more equitable distribution of future corporate capital and faster growth rates of private sector investment. It would shift primary national income maintenance policies from inflationary wage and unproductive income redistribution expedients to market-based ownership sharing and dividend incomes.
The Capital Homestead Act’s central focus is the democratization of capital (productive) credit. By universalizing citizen access to direct capital ownership through access to interest-free productive credit, it would close the power and opportunity gap between today’s haves and have-nots, without taking away property from today’s owners.
Goals of the Capital Homestead Act
|"No, no! I said DEATH and taxes!"|
The Capital Homestead Act is designed to:
1) Generate millions of new private sector jobs by lifting ownership-concentrating Federal Reserve credit barriers in order to accelerate private sector growth linked to expanded ownership opportunities, at a zero rate of inflation.
2) Radically overhaul and simplify the Federal tax system to eliminate budget deficits and ownership-concentrating tax barriers through a single rate tax on all individual incomes from all sources above basic subsistence levels. Its tax reforms would:
a) eliminate payroll taxes on working Americans and their employers;
b) integrate corporate and personal income taxes; and
c) exempt from taxation the basic incomes of all citizens up to a level that allows them to meet their own subsistence needs and living expenses, while providing “safety net” vouchers for the poor.
3) Restructure inheritance and gift taxes (“death taxes”) to discourage transfers from one generation to the next, of “excessive” concentrations of wealth (i.e., when the income generated by one’s capital far outstrips one’s capacity to consume the goods and services of others, and where one’s unconsumed income is simply reinvested in more capital acquisitions, resulting eventually in the monopolization of future capital ownership opportunities by the already wealthy). In order to promote individual initiative, capital self-sufficiency and limited economic power of the state, inheritance policy should encourage the broadest possible distribution of private property ownership in income-producing assets.
Tomorrow we’ll take a look at some Capital Homesteading “Vehicles” for democratizing access to capital ownership.#30#