by Dick McDonald http://riseuptheoryofeconomics.com
Faced with the competing interests of right and left - Republicans and Democrats – it was up to me if I was to construct a new economic theory to meet certain basic requirements of both philosophies. The right had recently been obsessed by the need to increase the flow of capital into the equity markets to keep the economy growing. They had devised both the Fair Tax and the Flat Tax to free segments of our society from punitive taxation to increase that flow. Neither was advocating a reduction in the tax load Americans have to bear. They were both just adjusting which Americans were going to do the carrying.
Democrats, on the other hand, and their many distinct special interest groups were continuing to look to the state for answers to many social and economic needs. They were pushing to tax the rich more to finance the programs redressing their myriad of grievances of their constituents.
I concluded that both sides were fighting for money. Republicans were fighting to keep what they had and make more of it and Democrats were fighting the rich to share “some” of it. It boiled down to man’s reason for creating governments in the first place – property – who has it and how can I get it.
These philosophies differ in their way to get property. The Democrats, even the wealthiest of them, come down on the side of compassion and are willing to take from the rich to redistribute to the poor. On the other hand, Republicans know that the rich pour their funds into the capital markets to create jobs and business that makes our capitalist system keep pace with our expanding population and improving quality of life. It also makes the rich, richer.
How can one economic theory meet the “property” demands of both parties? How can it increase the property of the “have-nots” while at the same time increase the property of the “haves”?
I hit on this approach. Let’s create an economic theory that does both. It must let the have-nots become rich and at the same time let the rich get even richer. To travel that road I had to think outside the box. Religious texts have for millenniums preached that there always will be poor people. If I was to create an economic and societal fix that made the poor rich I would be flying in the face of established religious and political doctrine. That will be the cross that I - and if they agree to it - the American people will have to bear if they want to free themselves from the “big government” nightmare that is confiscating and wasting “their property” in the form of “taxes”..
As a veteran of 40 years of fighting to keep taxes low for the rich, I said why not adopt what my Dad had told me when I was four and what I had been doing for 40 years; let the people keep their taxes and invest them for themselves in the capital markets to eventually become wealthy. Letting government take their money is like flushing it down the toilet.
So the question came up how can we pump money into the capital markets to make the Republicans happy and at the same time make the poor and middle class rich in order to make the Democrats happy? To me that was simple. (1) Repeal our entitlements, (2) guarantee that the entitlement benefits now in place would all be honored and (30 create involuntary personal investment accounts out of the 15% of payroll taxes deducted every year from working Americans. Then invest those personal account funds directly into the capital markets to put the economy into hyper drive. Viola everyone is happy; ordinary Americans, political parties and most of all the citizens of the world who look to America to guide them to a better life.
There you have it; a solution that satisfies the needs of both parties. I call it the “rise up theory of economics” and it is the big brother of the “trickle down theory” that has worked wonders for the rich in the last 25 years. However “rise up” doesn’t just voluntarily “trickle down” from the rich to the middle class and poor. It is going to be an involuntary rain storm of mammoth proportions for all classes of Americans and substantially close the gap between the rich and the poor.
If you are interested go to:
www.makethepoorrich.com
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