Guest Blog by Gary Reber
Michael Bloomberg has penned
an editorial column in which he calls for embarking on the largest public
investment in infrastructure in generations, with government issuing new money
to finance this. This money will be backed, as it is today, by government debt,
repayable with future taxpayer dollars.
Under Bloomberg’s long-term
plan, projects would be initiated to build the clean energy economy our country
needs. The projects would include major new investments in wind and solar
power, a national energy
transmission grid, energy efficiency for buildings, and the electric-vehicle
manufacturing industry, which will benefit U.S. automakers.
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| Michael Bloomberg |
As with all past taxpayer-supported government stimulus programs, the
advocates, including, in this case, Bloomberg, argue support for such
investments to create millions of new jobs, including for many Americans who
lose work in industries impacted by globalization and tectonic shifts in the
technologies of production. While it will take years to complete such projects,
Bloomberg argues, and I agree, “the act of investment — and putting people to
work — sends exactly the kind of signal to the marketplace that our country
will need.”
What’s missing? –– Who should own the new productive capital assets the
taxpayer-funded projects will create? It will not (and should not) be our
government who will “put the shovels in the ground” but private sector
companies who will be awarded contracts. While the investment in private sector
companies will definitely result in the creation of jobs for anyone able to
work, what is missing in Bloomberg’s editorial is how will the owners of the
companies awarded contracts benefit?
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| Gary Reber |
Throughout our history, taxpayer-supported stimuli have concentrated
capital asset ownership and further enriched, via ownership, the wealthy
capital asset ownership class, who become the employers of the workers needed
to execute the projects contracted. Typically, the workers are excluded from
gaining ownership stakes in the companies that employ them and have only their
wage earnings to show for the bailouts by taxpayers (meaning themselves). Other
non-owning citizens are completely excluded from sharing in the economic growth
they are financing with their tax dollars.
If I had campaigned for President, I would have outlined a comprehensive
“Own The Future” plan that sets requirements for every citizen, workers
included, to gain shares in the ownership of the new productive capital assets
to be formed, and not just argue for job creation. The plan’s agenda would
ensure that every citizen gain equal access to the means to acquire personal
ownership stakes in the capital assets formed on an annual basis, and be
rewarded with a new source of earnings –– full dividend payouts on their shares
of for-profit corporations.
One component of the plan would be to dramatically raise the corporate
tax to at least 90 percent with the caveat that full earnings paid out by a
corporation to the owners of the corporation would be 100 percent tax
deductible. While also eliminating all payroll taxes, this corporate deduction
would eliminate the income tax on corporations and would tax all dividends paid
out as personal income of the owners, along with wages, dividends, gifts and
inheritances, and other sources of income. To grow, corporations would issue
and sell new stock representing new capital asset formation. Incentivizing or
requiring corporations to finance their growth by issuing and selling new stock
would create opportunities to broaden capital asset ownership.
We certainly do not want to issue tax cuts in the way we did in the past
as that would result in another major giveaway to corporate America and the top
1 percent. For example, a 2004 tax holiday designed to prompt corporations to
bring home profits they had parked overseas was an idea to incentivize them to
spend the money on jobs and domestic investment. Instead, the controlling
owners of corporations spent the money on stock buybacks to benefit themselves
and certain shareholders and fatten executive pay.
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| Capital credit for every child, woman, and man. |
To pay for this broadly owned capital formation, I would have local
commercial banks and the twelve Federal Reserve banks make insured,
interest-free capital credit loans available on an annual and equal allocation
basis to every child, woman and man for investment in the corporations
growing our economy, both established companies and viable startups, with
feasible growth projects including infrastructure and green energy development.
Such capital loans would be solely repayable with the full earnings of
the investments paid down in pre-tax dollars out of what the assets underlying
that stock yield. In this way, we can create new capital asset owners
simultaneously with the growth of the economy and see EVERY citizen’s wealth
portfolio grow annually as we build a responsible growth economy that protects
and enhances our environment, and supports general affluence for every citizen.
Not only would citizens benefit from a new source of income –– dividends –– but
millions of jobs would result.
If Bloomberg’s plan is implemented, it will result in another major
giveaway to the controlling owners of corporate America, sold solely on the
basis that the investments would create jobs and stimulate further private
sector investment. Furthermore, any funding that does not come from tax dollars
will add to the already burgeoning government debt, as new government
debt-backed money is created by the Federal Reserve and pumped into the
economy.
In addition to reforming government tax policy and monetary policy, we
need to design trade policy so that we decouple from our dependence on the
slave-wage labor and unregulated, environmentally destructive policies of
authoritarian, human rights violating countries, such as Communist China. As a
result of trade policies sanctioned by previous governmental administrations,
we are experiencing the disastrous impact of our reliance on such foreign
entities and our shutting down of supply chain and finished goods and products
manufacturing in our country. We now need to shift to massive investments in
building up our own homeland manufacturing capabilities and renewed investment
in the common good with a vision of social and economic justice, woven into the
ways we interact with and care for one another.
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| "I like capital ownership!" |
Simultaneously, and this is extremely important, we must empower EVERY
child, woman and man to gain personal ownership stakes in the viable growth
projects to be carried out by both established corporations and viable
startups. Thus, the policy direction from now on needs to create new owners of
productive capital assets simultaneously with the responsible expansion of the
economy, ensuring both protection and enhancement of our environment. This will
entail reform of our monetary system, tax laws and trade policies.
An emergency and challenge lie before us. We need leaders who will step
up and advocate for this paradigm change in the structuring of our private
property-based economic system, ensuring that EVERY citizen will own
wealth-creating, income-producing capital asset property.
One aspect of the solution is
the enactment of the
proposed Capital Homestead Act (aka Economic Democracy Act and Economic
Empowerment Act). And The
Capital Homestead Act brochure, and Capital
Homestead Accounts (CHAs).
Also support the Agenda of The
JUST Third WAY Movement (also known as “Economic
Personalism”).
And support Monetary Justice
at http://capitalhomestead.org/page/monetary-justice.
For an in-depth overview of
solutions to economic inequality, see my article “Economic Democracy And Binary
Economics: Solutions For A Troubled Nation and Economy.”
Gary Reber
is the founder and Executive Director of For Economic Justice
(www.foreconomicjustice.org), and an advocate and author for economic justice
through broadened ownership of wealth-creating, income-producing physical
productive capital. Mr. Reber is a board member of the Center for Economic and
Social Justice (CESJ) and a founding member of the Coalition for Capital
Homesteading. Mr. Reber founded with binary economist Louis Kelso, Agenda 2000
Incorporated in 1967 to advocate policies and programs to broaden productive
capital ownership in urban development projects.
