At the most basic level every
citizen of the United States would receive say 100 shares in the trust.
Newborns would receive 100 shares at birth but held in trust by the trust on
till they reach adulthood. If we stopped here it would be a complete disaster.
The plan would be nothing more than a disguised welfare system. Giving people money for doing nothing
destroys them in the long term. There is no source of self-respect or
achievement as previously found in exchanging labor for income. So people have
to do something in order to earn this income from the trust.
In essence, the plan
needs to establish a way for people to earn more shares based on what they do. One way to think about this is to harken back to the days
when some of us might have been in the Boys and Girls Scouts. In that system
there was a progressive set of activities which led from newbie Cub Scout to
Eagle Scout at the end. Throughout that process individuals in the boys and
girls Scouts could earn merit badges in a wide variety of activities the Scout
organization considered constructive and character building.
In a similar manner the ACT
directors could construct a series of activities ranging from the artistic to
the altruistic that when successfully
completed word earn the individual additional shares in the trust. Thus the
more ambitious and energetic individuals could pursue a wide variety of
structured activities that would allow for their progression up a ladder
similar to the progression people could experience in their careers in the past
when employment was a viable option. Those who are a little more laid back
could be content with just their basic
allocation of shares which would be equivalent perhaps in current
dollars to 25 to 30,000 a year.
Who decides how much and for what?
And this is difficult question
fraught with political quicksand traps. It is difficult but not impossible to
address. A panel of academic, religious,
business and political leaders could be convened
to determine what these “merit badges” would entail, how to certify their
achievement objectively and how many shares they are worth. I'm sure this CBO
will be happier get on that one right away.
Implementation
Clearly something like this cannot be implemented 100% overnight. It would need to be started on a very small experimental
scale where the trusts that are generated are quite modest as is the quarterly
dividend paid to citizens say on the order of a $2000 or $3000 a quarter. As we move into the rest of the century and
if, as many experts believe, jobs will continue to permanently disappear over
the next 10 decades, the amount of money raised by the trust and the amount
distributed to citizens could then gradually increase in proportion to the
degrees in employment opportunities.
Is important to note that under this plan individuals could earn
income from two sources. Everyone could earn
income as a merit badge. Some individuals could also earn income from regular
employment or entrepreneurial activities. A citizen could be a “merit badger” and a producer at the same time if
that individual can secure employment, self or otherwise. Under this plan there will still be a fairly wide
distribution of incomes among the citizenry depending on their level of energy,
aggressiveness, intelligence and luck.
At first it may seem that the people who hold most of the money now, whether
they be individuals or corporations, are the losers in this plan. Yes, it is true that we will have to borrow one of Robin
of Locksley's old tricks and rob from the rich to give to the not so rich. But this is the only way the rich among
us will survive long term. If income from labor all but disappears for the majority of
citizens by the end of this century the rich among us will not be able to sell
anything to anybody and the system will collapse. If we do a little
redistribution in the manner described here it is possible that the economy
would grow at a much faster rate and the size of the pie get bigger and bigger
for everyone concerned.
Some of us will still
get a bigger slice of that pie and frankly I think that is just. What we want
to avoid at all costs is the pie shrinking to the size of a penny where no
matter how big your slice is, it ain't worth much.
3 comments:
Assuming there would be a Citizens Trust Fund, you could fund it with Green Money issued by the Treasury. The Treasury could then buy Stock Index Funds and Bond Index Funds and the Trust Fund would grow as the economy grows and prospers.
However, my personal solutions would be different than a Citizen Trust Fund. The unemployment problem can be solved in my view. It is not hopeless, but would require fundamental change in Washington! Without change in how the Congress and Executive Branch operates today, then we will get more of the same of what we have been getting. Here is a short version of what would have to be done.
1. Downsize the Federal Government. It is too big with too many fiefdoms and arrogant overpaid bureaucrats. A good start would be a 20% reduction in federal employees. Let them go to work in the private sector and earn a real living like all of the rest of us. The current IRS Commissioner, John Koskinen, is one of the most arrogant bureaucrats I have ever seen testify before Congress. He apparently thinks the IRS is above the law.
2. Downsize the military and eliminate many overseas bases. Maintain a strong military that can adequately defend America against any aggressor! Stay out of All foreign wars. Let the people of each country decide for themselves what type of government they want. We need to stop being policeman of the world and getting our soldiers killed in other people's civil wars. Conservative estimates are that Gulf War 1, the War in Afghanistan and Gulf War 2 have cost the US taxpayers $3 to $4 trillion dollars. If these wars had not been fought, all of that money could have been spent on infrastructure and education in the US or used to pay down the national debt.
3. Reduce the corporate tax rate from 35% to 15%. Tax dividends and interest at a 15% rate. Use a progressive income tax rate as I suggested in previous email of 5% to max. of 30%. I predict this would set off an economic boom in this country as businesses start investing in new plant and equipment and start hiring employees again as the economy takes off and demand surges for products. This would make the US competitive again in many products that have been shipped overseas.
4. Greatly reduce government red tape bureaucratic regulations so that entrepreneurs find it easy to start new business and hire new employees. Unleash the entrepreneurial risk takers who create new small businesses. Give them lower tax rates for say the first 3 years of their business. After that they pay regular tax rates.
This is just a start, but all of these actions will greatly reduce the unemployment rate and get more people working and paying taxes again, so government tax revenues will increase. These actions will grow the economic pie bigger, so more people can share in the wealth of America. The solution is not more government transfer payments. Before government can give money to any group of people, it must first take that money from some other group of people and then set up a large bureaucracy to administer those programs. In that process, a lot of the tax money stays in Washington to run the bureaucracy and never gets to the people it was intended for.
So in summary, downsize the federal government, reduce tax rates, stay out of wars of choice in foreign countries, downsize the military, eliminate bureaucratic red tape regulations and let the free enterprise system go to work to solve the unemployment problems.
Love the blog. Keep it coming!
Clarifying the Moderators recent email about my post. One sentence was mentioned and taken out of context, without the full explanation given in my entire post on the Blog.
I never used the word Libertarian in my post. That viewpoint was added. I agree with some issues in the Libertarian Party Platform and disagree with others. It would have to be discussed on an issue by issue basis. For example, the Libertarian Party does not believe US troops should be sent to fight in foreign wars which are other people’s civil wars. The LP believes in a strong military to defend against any aggressor who threatens the security of the American people. I agree with that. The Libertarian Party believes welfare and other social programs should be eliminated. I disagree with that. We need some social safety nets for those who can’t provide for themselves.
I never mentioned Ayn Rand in my post. That viewpoint was added. I think she was wrong on a number of issues. She went too far on the social issues. I believe there should be a social safety net for those of real need. However, today we have many who are on Government benefits by fraudulent means. I have firsthand experience of that in my volunteer job as a Guardian Ad Litem for Foster Care Children.
I never mentioned the Augusto Pinochet Dictatorship in Chile as an example of a Libertarian form of Government. That viewpoint was added. Pinochet ran an outright Fascist far Right Wing Government that murdered people who disagreed or protested. Pinochet seized the Government after the CIA disposed of the elected Government of Salvador Allende. I abhor what Pinochet did. To cite this as an example of Libertarian principles at work is beyond the pale.
I never mentioned the Koch Brothers. That viewpoint was added. I don't like the Kochs and their politics. They are far right wing Republicans. I’m not a Republican, let alone right wing. And to set the record straight, I’m not a left wing Democrat either. I’m an Independent who does my own thinking and does not follow any rigid party line.
I never said anything about Total Laissez Faire in my post. That viewpoint was added and I don't agree with that viewpoint. There must be some government social safety nets as I have stated earlier.
One thing is for sure. The Republicans and Democrats are not solving the important problems that we all face. 95% of incumbents get re-elected each election cycle. One definition of insanity is to keep doing the same thing over and over again, but expecting different results. People complain that the Congress is a do nothing Congress. Yet they continue to vote for more of the same.
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