In the
previous posting on this subject, we posted another section of our recent
CESJ position paper, “Universalizing
Capital Ownership.” Today we get to
the final section of the paper, dealing with the short-term emergency measures
we believe to be necessary, and a brief outline of the long-term reforms to the
system that need to be carried out. Of
course, if you want to read the entire paper without having to go back and read
the individual postings, just click on the link above to the full paper. It’s pretty short.
Again, the paper
suggests a number of things that can be done to ameliorate the immediate
situation and lay the groundwork for a just and effective recovery. Today’s portion focuses on short-term
emergency measures and long-term reforms (obviously).
UNIVERSALIZING
CAPITAL OWNERSHIP
How Article 17 of the Universal Declaration of Human Rights Can Save the
Economy
April 17, 2020
Center for Economic and Social Justice (CESJ.org), April 17, 2020
Part IV
Emergency
Short-Term Measures
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| The first duty of government is to the people. |
Government’s first duty is to protect
the lives, security and property of its citizens. In the short-term this may
necessitate actions that are redistributive and that create added government
debt. Such debt results when the government spends money created and regulated
by the central bank that has nothing of value behind it other than the
government’s promise to pay in the future for its spending deficits via
taxation. Those measures, however, should cease immediately after the crisis is
over, making whole those people who had their property rights infringed upon,
and collecting future taxes to repay the government’s increasing debt from
deficit spending.
Where the new “emergency money” can be
channeled to private sector businesses to produce emergency medical and other
supplies needed during the pandemic, such money should flow as loans through
financing mechanisms such as Employee Stock Ownership Plans. ESOPs, which are
already in the law, can create equal capital ownership opportunities for every
employee in the companies producing the emergency supplies. The government
would serve as the guarantor of those loans, and as the customer that purchases
and distributes the emergency goods where needed.
Long-Term
System Reforms
To offer hope, maximize collaboration
and inspire unity among all citizens during and following the current crisis,
leaders of all nations should take immediate advantage of the current crisis to
communicate a new vision and plan. Countries should immediately adopt laws
promoting major reforms in monetary policy, central banking, tax, capital
credit insurance and other institutions. These reforms would provide a solid
foundation for a sustainable, resilient and just economy consistent with
Article 17 of the Universal Declaration of Human Rights.
As a consequence of the world’s
current war to defeat the COVID-19 coronavirus, central banks are creating
unlimited emergency money to help governments address the near total breakdown
of world’s production and consumption capabilities. When the pandemic ends,
commercial and central banks in all countries should issue money for achieving
full production linked to widespread purchasing power from future capital
ownership incomes for all survivors.
 |
| Yes, it can be done. |
Using the U.S. as an example for other
governments and central banks, all money backed by US government debt (now
exceeding $24 trillion or almost $74,000 per citizen) should be gradually
retired and replaced with money backed by “green growth” productive assets
needed by businesses for faster rates of growth in a more just global free
market economy.
This new money would be made
accessible through interest-free, fully insured new loans made annually by
local banks to every person from birth to death. These loans would cover all
costs of purchasing voting, full-dividend-payout shares of corporations and
cooperatives that produce goods and services for potential national and global
consumers. Each citizen’s capital acquisition loans would be wholly repayable
with the full stream of future profits earned on the shares. (Follow
this link to see how Capital Homesteading would finance universal citizen
ownership of future green growth assets.)
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| Somebody has to hold the net; it can't hold everybody. . . . |
Central banks, which should no longer
be controlled by government but by all citizen-owners, should use their “rediscount
powers” as a substitute for charging interest for regulating the monetization
process. In addition to the principal to be repaid on capital credit loans to
citizens, would be a one-time premium to cover the risk of loan default as well
as reasonable charges for the services of the central bank and bank lenders.
To meet the full costs of the
government and start paying down past and future debt for legitimate government
services, a single-rate tax should be imposed on all personal income above a
per-citizen exemption sufficient to meet each citizen’s or family’s common
domestic needs, including education, healthcare and shelter. Government and/or
foundations would continue to provide a social safety net to take care of
anyone whose income falls below the exemption.
 |
| There is a better way. |
To increase the role of a more free,
just and non-monopolistic market system for economically empowering every
citizen, all payroll taxes, property taxes, and all other personal taxes, e.g.,
VAT and sales taxes, should be phased out. This would make government costs
more transparent, and make politicians more accountable, to the citizens.
To encourage full payout of corporate
earnings and finance new capital formation through the issuance of new shares,
dividends should be tax-deductible at the corporate level, potentially reducing
a corporation’s tax liability to zero. Dividends would then be taxed as
personal consumption incomes of all shareholders, except when used to pay for
qualified shares held within each citizen’s tax-sheltered ownership trust
account.
Conclusion
The depth and breadth of today’s
global crisis creates a moment of unparalleled opportunity, where the minds of
leaders and citizens may be most open to systemic change, particularly in our
monetary and tax systems, so that money, ownership and economic power flow from
the bottom up, not the top down.
If we muster our knowledge, resources
and resolve, humanity can overcome the pandemic threatening our lives and
economies. If we open our eyes to a new paradigm of economic personalism and
justice, we can build for every person a more sustainable, environmentally
sound economy and life-enhancing future.
#30#