A Copernican Revolution in the American Economy!

A Copernican Revolution in the American Economy!

4 TRILLION DOLLARS! On average, the American economy grows by that much annually. This is an average of how much new value is created each year by the US economy. 330 MILLION! This is the approximate population of the US in 2021. So if you divide $4 trillion by 330 million people, you find that on average the US economy is growing at a rate of $12,000 per person per year.

With these numbers in mind, let’s examine what would happen if the Federal Reserve, through local banks, issued $12,000 in CAPITAL LOAN at ZERO PERCENT INTEREST to every man, woman and child in the United States, ANNUALLY? My question at this point is has money been spent? The answer is NO MONEY SPENT! All that has happened is that $4 trillion worth of capital credit has been issued that is just WAITING TO BE SPENT.

Note here that EQUITY LOAN is different from CONSUMER LOAN as it can only be used to purchase wealth-creating capital assets (stocks, bonds, land, buildings, machinery, patents, copyrights) that are expected to yield regular, predictable dividends to its owners.

Now suddenly a guy decides to use his equity loan to buy $12,000 worth of blue chip stocks. At this point $12,000 HAS BEEN SPENT. But it is CURRENTLY collateralized (secured so that neither the local bank nor the Fed is at risk) by the value of solid blue chip stocks that were purchased at zero percent interest.

To speed up the home ownership process, the new owner is also allowed to pay off this home equity loan using the PRE-TAX DOLLARS generated from their stock. In other words, the new loan is automatically secured. The owner does not dig into his savings account. They do not put a second mortgage on the family home. They repay the loan using PRE-TAX EARNINGS/dividends. In investment circles, this strategy is called a “leveraged buyout.”

On average, the loan will pay off (self-liquidating) in 3 to 7 years. But the dividends continue to flow, creating RESIDUAL INCOME for their owner. Multiply that scenario by 10 years and you’ll find that $120,000 has been invested on the owner’s behalf by his 10th birthday. By the time they reach college age, over $200,000 will be invested on their behalf, providing all the residual income they will need to attend college while taking on NO COLLEGE DEBT. And in retirement, the owner will not need social security.

To repeat, not a single penny is spent UNTIL the purchase is made. Once this happens, the loan is immediately secured by the value of the wealth generating asset purchased. The self-liquidating loan is then repaid with pre-tax dollars over a predictable period of time so that neither the individual nor the government incurs long-term debt. And to make things even more secure, a small percentage of the purchase price is used to INSURE the entire transaction, just in case the solid blue chip stock fails to perform as expected and doesn’t pay out.

The Biden/Harris Golden Opportunity…
Now, if you multiply that scenario by 330 million people a year, you can see how the new Biden/Harris administration could lead our economy out of the WORST ECONOMIC CRISIS America has experienced since the stock market crash of 1929. In the process, they would create no national debt and no individual debt.

Within a decade and a half, this strategy, if used, will gradually eliminate poverty and a myriad of related problems, including STRUCTURAL RACISM. It will also systematically democratize the free market economy, create millions of NEW TAXPAYERS that will reduce the tax burden on current tax-paying Americans, allow social security programs to fade into the sunset, balance the budget, and possibly even pay off national debt.

16 Frequently Asked Questions

1. Where did $4 trillion come from? It comes from NEW WEALTH/VALUE (from a naturally growing US economy) created (on average) per year. It’s destined to happen! Someone will access and benefit from this predictable, newly created wealth. EDA assumes that the many (like us the people) should have access to the funds needed to participate in the property part of the economy – NOT just the few.

2. Won’t EDA lead to inflation? Nope. It will not happen. Note that this strategy does not add a dime to the projected annual growth of the US economy. Either way it will happen. So the EDA does not depreciate or devalue the existing exchange rates. The only question is who can participate and benefit? Will it be us the people (the many)? Or just 1% (the few)?

3. Isn’t EDA socialist? No it isn’t. Capitalism is all about PRIVATE PROPERTY. Socialism is about PUBLIC OWNERSHIP. In this light, EDA is all about private property. But it systematically works against concentrated wealth/power. It also democratizes our free market economy. In the process, he SIGNED POLITICAL DEMOCRACY.

4. Won’t the EDA increase my taxes? Nope. It will not happen! What it will do is create tens of millions of NEW TAXPAYERS who will in turn help current taxpayers shoulder the tax burden. This will actually REDUCE taxes for most people who currently pay taxes. It even offers the potential to PAY OFF THE NATIONAL DEBT.

5. Let me calculate. A family of 4 would receive a $48,000 (4 X $1,200) capital credit per year. And a family of 10 would receive $120,000 (10 X $12,000) of capital credit per year. right So doesn’t the Economic Democracy Act effectively pay for a couple to have lots of kids to get lots of money? The short answer is that because the line of credit is non-transferable, parents cannot access or directly benefit from it. But more importantly, research shows that as incomes increase, birth rates decrease. So in either case, the EDA will not encourage overproduction of children.

6. How does economic democracy differ from universal basic income? UBI is simple and relatively immediate. That’s his strength. It is consumer oriented and remains relatively constant in size over time. It is also secured/secured by increased national debt. UBI is therefore a SHORT-TERM FIX and creates DEPENDENCE on the government. In contrast, EDA is more complex and requires some time (5 to 7 years) before residual income is actually generated. EDA is investment oriented, meaning it accumulates and grows over time. It is also backed by insured, wealth-creating capital assets that back/secure every transaction. Thus, it does NOT create long-term debt for either consumers or the government. EDA is therefore a LONG TERM FIX that must be phased in as it creates more people who are INDEPENDENT of the government.

7. Is economic democracy similar to an employee ownership plan/ESOP? yes But instead of covering only those who work for employee-owned companies who have access to ESOPs, Economic Democracy uses the same strategy to cover ALL (regardless of age, gender, race, religion), most of whom do not have the necessary funds to participate in the (presumably profitable) property side of the American economy.

8. Has economic democracy been tested in a pilot project to see how it performs in real life? Yes and no. The basic mechanics of this strategy have been thoroughly tested in the approximately 8,000 employee-owned companies created over the past 50 years. As we said in the previous question, the EDA is really just an extension of the ESOP strategy, which aims to give all Americans an equal opportunity to participate and benefit from the ownership side of the American economy, where all the new wealth is created. However, it has not yet been formally tested in a national setting.

9. What percentage is used to calculate average ROI and profit potential? Using very conservative estimates, we chose 15% as the ROI BEFORE TAXES. Historically, before the recent wild swings and today’s wildly inflated stock values, AFTER-TAX returns on investments have been in the 9 to 12% range. The payback period is calculated by dividing one by the rate of return and rounding to the nearest whole number. So 1/0.15 = 6.666 (round up to 7 years).

10. How did economic democracy reduce wage slavery in the US? By giving everyone (as opposed to a few) legal access to the property portion of the American economy (where almost all new wealth is generated) and creating residual income for everyone, Economic Democracy reduces the need for everyone to sell their most productive hours of the day ( week, month, year, life) to an employer in exchange for a salary.

11. How will the EDA affect the crash/boom of the US economy? It effectively eliminates the imbalances that are responsible for the bust/boom dilemma.

12. Does the EDA appeal mostly to conservatives or mostly to liberals? Frankly, this is a strategy that appeals to BOTH SIDES of the island. He appeals to the fiscally conservative Republican who wants to reign in spending and live within our means. He also appeals to the Liberal Democrat who wants a level playing field where everyone has equal opportunities. And because it systematically promotes independence from government (ie freedom), the only people who disapprove of the EDA are autocrats who want to control us the people.

13. Why would the mainstream media fail to inform “us the people” of such a revolutionary economic strategy? Quite simply, all mainstream media (including CNN and MSNBC) is owned and controlled by the one percent. And the one percent prefer to keep “us the people” in check and in the dark about revolutionary ideas that threaten to undermine their concentrated wealth/power. We are allowed to see and hear what media owners allow us to see and hear. In other words, America’s mainstream media supplies little more than profitable propaganda that, in the long run, supports concentrated wealth/power.

14. Why doesn’t academia introduce this strategy to all their future economists? Frankly, most economists have never been familiar with economic democracy. They cannot teach what they do not know. But in the 21st century, academia is largely dependent on corporate funding (ie the one percent) for its existence. So even if they are familiar with economic democracy, academics can hardly afford to introduce this revolutionary strategy to future economists without risking their own jobs in the process. Bureaucrats (conventionalists) almost never rock the boat.

15. Who is the main proponent of the Economic Democracy Act? That would be the Center for Economic and Social Justice (CESJ.ORG), based in Arlington, Virginia.

16. What are the three big questions CESJ wants to ask about any legislation that moves through Congress? Who owns it? Who controls it? Who benefits? In the case of EDA, every individual in the US owns and controls wealth generating assets and benefits from this strategy.

#Copernican #Revolution #American #Economy

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