With an appalling sameness, this week’s news items strongly resemble those of last week . . . and the week before . . . and the week before that, and so on. Some of the reasons are given below in the items listed, but frankly, this situation is going to continue until the Economic Democracy Act is adopted:
Projected Estimated Economic Democracy Act Accumulation Over Time
• Retirement Spending. Evidently AI is even taking over the gloom and pessimism business. Recently someone asked ChatGPT how much the “average” middle class couple needs in retirement. It’s a bit more than you might think: Housing: $29,145, Food: $7,249, Healthcare: $9,694, Transportation: $5,390, Entertainment: $2,696, Cash contributions (donations, gifts, alimony or child support): $3,851, Apparel and services: $1,219, Personal insurance: $963, Miscellaneous: $3,977, for a total of $64,184. Aside from the classification of “alimony or child support” as “cash contributions” (a court might have something to say about that, since “contributions” are presumably voluntary) and insurance of less than a thousand dollars(?!) — perhaps the AI left a few things out (like a provision for taxes) — these amounts seem reasonable . . . and unattainable as the presumed status of being “middle class” continues to soar out of the reach of increasing numbers of people. “Middle class,” in fact, would seem to be the new “upper class” when you need to be a millionaire simply to qualify — and the net worth of the “average American” given the increasing burden of debt that results in many purportedly affluent people having a very low or even negative net worth. Under the Economic Democracy Act, projected estimates of income at retirement age give $88,691, more than enough to cover the “average” middle class retirement expenditures — and that’s from the EDA alone. Add to that the recommended increase in the personal exemption of $30,000 per non-dependent, and taxable income would fall to $28,691. Even assuming a tax rate of 50%, the amount available from just the EDA to cover the estimated $64,184 of expenditures would be an estimated $74,346 after taxes, more than enough to cover all the estimated retirement expenditures.
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| Crazy Rich Anything |
• Crazy Net Worth. In the above news item, we mentioned that many Americans, even (or especially) those with a lot of stuff, while they may be “wealthy” or at least affluent on paper but often have a low or even negative net worth. Not so among the truly wealthy. Past a certain point, as Louis Kelso and Mortimer Adler observed in The New Capitalists (1961), “money” — at least in the form of productive wealth (and that, not government debt, is what should be backing all money) — makes “money” without any effort or even conscious input on the part of the owner of the productive wealth. As this article notes, once wealth accumulation passes a certain point, it “goes crazy.” Well, the Economic Democracy Act won’t usually result in “crazy” wealth accumulation, but it would provide a means for everyone to acquire and possess a meaningful capital stake and gain an adequate and secure income thereby, resulting in a more equitable distribution of wealth throughout society.
• Billionaire Tax Bonanza? What would happen if “the rich” paid their “fair share” of taxes? Well, first you have to define who is “rich,” and what constitutes a “fair share,” and finally what is a tax . . . which is not too clear in these days of the Power-That-Is imposing taxes that he neither understands nor does what he thinks they do. Plus, there was a brief period some decades ago when a person could be deemed “poor” for one government program and at the same time “rich” for another. This was soon corrected, but it does demonstrate the subjective nature of what is “rich” and what is “poor” in the minds of government bureaucrats and politicians. In any event, someone asked ChatGPT what would happen if “the rich” paid their “fair share,” and this was the answer: “Billionaire income is largely derived from capital appreciation, not wages. In other words, they make money on their money through interest. And as of yet, the U.S. tax code doesn’t tax ‘unrealized capital gains’ so until you sell your assets, you could amass millions in appreciation and not pay a dime on it, ChatGPT shared.” Unfortunately, there are a few misconceptions in this response, which reflects a couple of misconceptions available on the internet, as we might expect: 1) There is a bit of a difference between capital gains, appreciation, and interest, something evidently not understood by too many people. Capital gains are gains resulting from the sale of an appreciated asset. In a sense, “unrealized capital gains” is redundant, as capital gains do not exist until they are realized, i.e., the asset is sold. Appreciation, on the other hand, means a change in the value of the asset itself. It doesn’t mean anything until and unless the asset is sold. To tax someone on “unrealized capital gains” is to force them to sell the asset to pay taxes on something that wouldn’t even exist if they didn’t sell the asset! 2) Interest is not capital gains. Interest is the earnings generated by the asset, not a change in the value of the asset. With thinking like this, it’s no wonder people resist the common sense tax reforms of the Economic Democracy Act.
• Trump Tariff Trauma. Trumps Terrific Tariffs launch (again) today, and (of course) the stock market is plunging in anticipation of the economic effects of the Power-That-Is imposing taxes which Congress did not approve, are extremely regressive (i.e., falls heaviest on the poor), stifles trade, disincentivize production, destroy jobs, and generally kick the economy in the teeth and then jump on it with spiked boots once it’s down. As a case in point, take a look at the anticipated effect the tariffs will have on Europe: “[F]or U.S. consumers, even the reduced tariff is expected to spur higher prices. The Yale Budget Lab estimates that Trump’s tariffs, including the new rate for EU imports, would raise prices by 1.8% in the short run, the equivalent of an average household income loss of roughly $2,400. While the increase may sound insignificant, ‘the Federal Reserve’s inflation target is 2%. So we’re talking about almost a year’s worth of inflation above and beyond the inflation that we would’ve gotten anyways,’ said Ernie Tedeschi, director of economics at the Yale Budget Lab. ‘So that’s meaningful.’” Of course, there is a solution . . . which is to ditch the tariff fantasies of the current administration and adopt the Economic Democracy Act.
• Speaking With Forked Tongue? According to a report in the Independent, the European Union promised to invest €600 billion in the United States . . . and within hours admitted there was no way it could keep that pledge. As the report states, “The president [of the European Commission] also claimed that the agreement would bring $600 billion into American coffers by way of investments made by the EU into U.S. companies. But on Monday, multiple EU officials walked back the massive outlay by noting that it would be made by a variety of private companies over which the bloc has no authority when it comes to corporate spending priorities.” All this delusional activity assumes all new capital formation must come out of existing pools of money. That is not true, as anyone who knows the first principle of finance is aware. Financing for any feasible capital project should never be a problem, and it should never be a reason to try and shake down others with mafioso-type deals. Instead, simply pass the Economic Democracy Act.
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| Forced Savings |
• Inflation Inhibits Saving. It is a cornerstone of Keynesian economics that inflation induces “forced saving,” which shifts purchasing power from the poor to the rich so that the rich have enough money to invest in more capital to make even more money. It comes as no surprise, therefore, that inflation makes it difficult for the poor to save at the same time it is increasing the savings of the rich: “Inflation is the top obstacle to a comfortable retirement, said 57% of the 1,000 U.S. 401(k) plan participants and an additional 100 Gen Z plan participants surveyed last spring.” What’s the solution? Why not stop shifting savings from the poor to the rich and let the poor save and invest for themselves, as would be the case under the Economic Democracy Act.
• Inflation and “Tariff Uncertainty.” According to the Federal Reserve’s projections, inflation is expected to increase due solely to the fact that no one — not even President Trump — knows what is going to happen with the self-inflicted tariff trauma. Of course, some of the uncertainty could be cleared up if people could figure out whether the tariffs are being used as a political weapon or a revenue measure . . . but only some of it. Overall, the tariff obsession is working to undermine what is left of the U.S. economy at an accelerating rate. The solution? Adopt the Economic Democracy Act.
• “Back Door to Privatization of Social Security.” U.S. Treasury Secretary Scott Bessent has stated President Trump’s “Baby Accounts” are the first step to privatizing the Social Security system. We don’t think so, as the accounts are virtually customed designed to be a complete fiasco, but the point is well taken. What is needed is not a replacement of Social Security, but a reform of and supplement to the system. As detailed in the Economic Democracy Act, Social Security revenues could be merged into general revenues and made means based. If people’s capital ownership accounts (by whatever name) did not generate sufficient income, then Social Security would kick in. There is no need to terminate it.
• Greater Reset “Book Trailers”. We have produced two ninety-second “Book Trailers” for distribution (by whoever wants to distribute them), essentially minute-and-a-half commercials for The Greater Reset. There are two versions of the videos, one for “general audiences” and the other for “Catholic audiences”. Take your pick.
• The Greater Reset. CESJ’s book by members of CESJ’s core group, The Greater Reset: Reclaiming Personal Sovereignty Under Natural Law is, of course, available from the publisher, TAN Books, an imprint of Saint Benedict Press, and has already gotten a top review on that website. It can also be obtained from Barnes and Noble, as well as Amazon, or by special order from your local “bricks and mortar” bookstore. The Greater Reset is the only book of which we’re aware on “the Great Reset” that presents an alternative instead of simply warning of the dangers inherent in a proposal that is contrary to natural law. It describes reality, rather than a Keynesian fantasy world. Please note that The Greater Reset is NOT a CESJ publication as such, and enquiries about quantity discounts and wholesale orders for resale must be sent to the publisher, Saint Benedict Press, NOT to CESJ.
• Economic Personalism Landing Page. A landing page for CESJ’s latest publication (now with an imprimatur), Economic Personalism: Property, Power and Justice for Every Person, has been created and can be accessed by clicking on this link. Everyone is encouraged to visit the page and send the link out to their networks.
• Economic Personalism. When you purchase a copy of Economic Personalism: Property, Power and Justice for Every Person, be sure you post a review after you’ve read it. It is available on both Amazon and Barnes and Noble at the cover price of $10 per copy. You can also download the free copy in .pdf available from the CESJ website. If you’d like to order in bulk (i.e., 52 or more copies) at the wholesale price, send an email to info@cesj.org for details. CESJ members get a $2 rebate per copy on submission of proof of purchase. Wholesale case lots of 52 copies are available at $350, plus shipping (whole case lots ONLY). Prices are in U.S. dollars.
• Sensus Fidelium Videos, Update. CESJ’s series of videos for Sensus Fidelium are doing very well, with over 155,000 total views. The latest Sensus Fidelium video is “The Five Levers of Change.” The video is part of the series on the book, Economic Personalism. The latest completed series on “the Great Reset” can be found on the “Playlist” for the series. The previous series of sixteen videos on socialism is available by clicking on the link: “Socialism, Modernism, and the New Age,” along with some book reviews and other selected topics. For “interfaith” presentations to a Catholic audience they’ve proved to be popular, edging up to 150,000 views to date. They aren’t really “Just Third Way videos,” but they do incorporate a Just Third Way perspective. You can access the playlist for the entire series. The point of the videos is to explain how socialism and socialist assumptions got such a stranglehold on the understanding of the role of the State and thus the interpretation of Catholic social teaching, and even the way non-Catholics and even non-Christians understand the roles of Church, State, and Family, and the human persons place in society.
Those are the happenings for this week, at least those that we know about. If you have an accomplishment that you think should be listed, send us a note about it at mgreaney [at] cesj [dot] org, and well see that it gets into the next “issue.” Due to imprudent and intemperate language on the part of some commentators, we removed temptation and disabled comments.
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