ECONOMIC EQUALITY

 “Equality” Programs Aren’t Working

                    But Our USA Plan Will

Dick McDonald

Blacks have seen their annual income drop in President Obama’s first four years by almost $7,000 a year - all workers have experienced a drop of over $4,000 a year. Although President Obama recently claimed that the main goal of his second term is equality that same goal obviously didn’t work for him in his first term. But let’s be fair; not everything is Obama’s fault.

The facts are that over the last 44 years government has spent over $16 trillion on welfare, entitlements and means-tested programs in their “War on Poverty”. Predictably a greater percentage of Americans are in poverty today than when that “war” began. Predictably because government doesn’t create wealth it consumes and depletes it.  It only redistributes what wealth is left over after it takes its cut.

So when the “progressive” New York Times contends we need to rethink antipoverty policy we know their suggestions won’t work because their philosophy begins and ends with government as the vehicle where all wrongs are righted. And again government does not create wealth it consumes and depletes it through taxation and regulation.

However, NYT op-ed writer Nicholas Kristof recently pinpointed part of the problem when he opined that welfare and entitlement programs have only “addressed symptoms of poverty, not causes.” Unfortunately in his article he advances a .01% solution to a 100% problem. That was to spend more government money on the early development of children living in low-income zip codes.

That will be microscopically helpful in 15 to 20 years. It surely doesn’t address the problem now and that problem is poverty.  No one is saying that welfare and entitlements haven’t helped those living in poverty. What we do say at the Prosperity Commission is that we have to find a way to make the poor rich or comfortably so.  Until we do the problem of poverty and the ever-increasing $138 trillion of funded and unfunded national debt won’t go away.  It will progressively become more fatal to our way of life.

Most great wealth in America is created by investment. To prove that ask yourself where pensions invest their money. Investment in the stock market is where 98% of our pension assets are employed. Therefore the trick to making the poor wealthy is by their making an investment in the stock market and letting their investment accumulate, compound and grow over their working life into a sizeable nest egg.

That presents two problems. First where are they going to get the money to invest?  And second will they be willing to let that money remain invested for their entire working life in order to achieve the eventual goal of comfortable wealth for themselves, their families and their kids..  

Those questions are answered along with a myriad of others at www.theusaplan.com .  The ultimate result of the plan is that eventually the average American citizen will end up with a $4 million nest egg (today’s rate) and a $33,333 a-month retirement check.  Its enactment will immediately result in cutting the national debt from $138 trillion to $30 trillion and the creation of millions of jobs almost overnight.

The eradication of poverty is eons easier than to flying to the moon – and we already did that.

It's time

The Time to Eradicate Poverty Has Arrived

Dick McDonald

Today the people of the United States of America have an opportunity to make the world a better place. Rather than wasting time compromising the political ideologies of progressives and conservatives, Americans could use that time to employ modern economic and scientific advancements to eradicate poverty. 

The USA could lead the world into a new era where prosperity is the rule rather than the exception.

For example, if  Americans had enough money on which to live a decent life and a million-dollar nest egg to retire on (then pass on to their families) we wouldn’t need government to tax Americans to fund safety nets like Social Security and Medicare.  We wouldn’t have a $138 trillion debt to contend with; America would be financially solvent and countries all over the world would emulate us.

All economies throughout history have been free enterprise, free market, capitalist economies unless temporarily sidetrack by populist ideologues practicing socialism or dictators employing tyranny. Therefore in order to make a free enterprise, free market, capitalist economy like ours into one that sponsors the prosperity of the poor and lower classes it has to create the opportunity for the poor to invest in that economy and prosper in its growth.

Man hasn’t had the tools to address poverty until recently. With the advent of the digital age, massive and flexible databases, the internet and instant communications he now has them.  He can make dramatic nation-wide moves that will eventually enable all the people to achieve the American Dream of financial independence. No political party or political think tank is even attempting to address making the poor rich. It is the time to do so; in the process most of our economic and social ills will either fade or disappear entirely. 

We can’t make the poor rich without making all citizens even richer. To do that requires a simple change in the way the government does business. Instead of imposing a 15.3% payroll tax on income we propose the government send that money undiluted directly to an independent unreachable trust for all citizens to be maintained in each taxpayer’s own “USA” – universal savings account – and immediately invested weekly on their behalf and under their direction into indexed stock funds for their working life. 

The average American makes $50,000 a year and pays either 15.3% in payroll taxes if self-employed or shares in paying that amount with his employer if he works for somebody. The yearly $7,500 ($50,000 x 15%) investment amounts to $300,000 (40 years x $7,500) over an average 40-year working life. Invested weekly in indexed funds at the average rate of return of the S&P 500 in 40-year cycles generates a $4 million nest egg which throws off a $33,333 a month retirement check without reducing the principal. See here for the computation by year.

Today the market cap of all stocks on American exchanges is about $50 trillion. If in 40 years just 150 million Americans had a $4 million nest egg the market cap would be $600 trillion. In other words it took 236 years to get to $50 trillion. It would, under my plan, take just 40 years to add $550 trillion to that amount at today’s prices.

Given the choice of becoming a millionaire without investing a dime out of your present paycheck or staying on welfare and dependency programs most will opt for the former. In this manner the Plan, www.theusaplan , will wean welfare recipients off welfare and reduce the need for excess government workers.

Millions of jobs will be immediately created by the infusion of almost a trillion dollars a year into the stock market where the selling shareholders will no doubt invest much of their proceeds in new exciting ventures that will require millions of new employees.

In this manner the poor will be helping create their own new jobs and working-life income and at the same time insuring themselves of an affluent retirement and the best old-age medical care on the planet. 

A rising tide lifts all boats. Unfortunately America’s boat has been in dry dock too long. Enacting my plan will be the rising tide that makes the poor rich as well as everyone else richer.  The country will then be exceptional place we claim it is.

Let’s agree poverty has no place in the 21^st Century.

Read all about the Prosperity Commission’s USA Plan and its Rise Up Theory of Economics here.  Join us in our effort to make the world a better place.  You can e-mail us your thoughts at dick@...

USA PLAN: Immediately cuts the $138 trillion of debt to $30 trillion upon enactment

This is what Americans need – a time out from the politics of ideologues in Congress, political parties and the media and a simple easy-to-understand solution to the many problems we face.

Dick McDonald's solution is simple but outside the box of conventional thinking.

THE USA PLAN

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Rick Perry – Just another RINO?

So let’s go with his instinct and ignore his cowardice. . .

Dick McDonald - Ownership Society Institute

"We will fix the Social Security system so it will be there for our young workers..."

--Rick Perry speaking to the Iowa Credit Union League on 9/16 in Des Moines, Iowa.

This is essentially a major retraction on his “Ponzi scheme” remark at the debate last week.  The USA Today poll said 32% of the people wouldn’t vote for him because of his “Ponzi” characterization so like the politician he is he joined the Democrats and Republicans like Romney to “repair” the un-repairable rather than replace the system with private investment accounts like 15 countries have done following the lead of Chile and the advice of supply-side economist Milton Friedman.

Listen folks the only repairs on the table are a combination of raising the retirement age, means testing and reducing the rate of automatic increases in benefits.  Each is a MAJOR BENEFIT CUT and TAX INCREASE.

America what are you thinking? Are we socialists or capitalists?

In Chile which has been accumulating personal wealth for its citizens in personal investment accounts for 30 years lets 55 year-olds access special computers to decide whether to retire and what insurance annuity they want to buy with their accumulated nest egg. Our politicians are about to raise our retirement age to 75.

The American system Perry wants to fix has no nest egg accumulated for its workers. So he is just another mathematically-challenged RINO in my opinion. I pray that Sarah Palin enters the race and advocates privatization of the system like we thought Perry would do.

LET’S REVIVE THE ECONOMY NOW

Chile followed the advice of Milton Freidman’s Chicago school of economics and is presently running a 7% a year increase in GDP. And what are we running – 0%. If we ran a 7% increase our GDP would skyrocket with the addition of $1 trillion of sales and services each year. That would mean that on each day of the year including Saturdays and Sundays there would be an increase in the sales of goods and services of $2.74 billion dollars we didn’t have the day before.

Now think about this. How many jobs would be created to service an increase of sales and services of $2.74 billion dollars a day? Assuming $50,000 of sales per employee then we would add 54,800 new jobs every day 24/7 or 20 million jobs annually. Assuming $100,000 of sales per job we still would be adding 10 million jobs.

In other words privatizing Social Security in Chile was a massive job creator.

AND WHAT DO WE NEED IN THE USA TODAY?

JOBS, JOBS, JOBS.

My Rise Up America plan needs to be considered nationally. It does for the poor and middle-class what “trickle down” did for the rich and as a kicker creates millions upon millions of jobs immediately. Forget that it will create a $4 million nest egg and a $33,000 monthly retirement check for the average household in the future think about saving our economy today.

Only new investment capital creates new jobs in the private sector.  Why should we have to rely on the rich to supply that capital when the people – remember those of, by and for the people – can surely invest their payroll taxes in the economy and create their own jobs.

Can we get out of the sandbox and go back to class?

Can’t we measure up to Chile.

Come on! Let’s roll!

Dick McDonald
September 19, 2011

A Solution to Our Economic and Social Nightmare

Republicans and Democrats don’t need to compromise they need to use capitalism with a small amount of social discipline to make the country far more exceptional as well as geometrically more prosperous than it is today.

This Mission Statement for the website, www.riseupamerica.com, will only scratch the surface of the mission the "RISE UP AMERICA" (RUA) plan hopes to accomplish. To those of you who have never been wealthy, many of the goals listed below may seem like an "impossible dream". But give yourself the benefit of the doubt and accept for a moment the fact that "capitalism" can make you wealthy even if you don't have the "tools" to compete for the big bucks nor the cash to invest and save to become wealthy. You have seen the 40-year tables and realize that just by working, being stable and industrious during those years, you too can become wealthy under RUA.. Now review all the societal problems Rise Up plans to solve.

• Ends endemic poverty as we know it
  
  
• Delivers the American Dream to even those that can’t compete
  
  
• Uses the capitalism not socialism to solve many of our problems
  
  
• Creates "USA's" Universal Savings Accounts for everyone
  
  
• Finally economically emancipates women through the sharing of "USA's"
  
  
• Provides retirement checks that allow retirees to live affluently
  
  
• Forces a 15% savings on citizens at no new cost to them
  
  
• Creates wealth by compounding (see the tables)
  
  
• Reduces the National budget eventually by 40%
  
  
• Immediately liquidates as much as $100 Trillion of potential entitlement debt
  
  
• Delivers the biggest tax cut in history
  
  
• Gives the disadvantaged a reason to live and care about their life
  
  
• Delivers "reparations" in the form of a USA - a personal investment account
  
  
• Reduces crime, victimization, and dependence on government
  
  
• Reduces stress caused by crime and financial difficulties
  
  
• Eliminates the need of the private sector to finance retirement
  
  
• Makes business more competitive
  
  
• Eliminates retirement costs their competitors don’t have to pay
  
  
• Eliminates the union’s need to bargain for retirement funding
  
  
• Creates "ONE" retirement account that replaces millions of plans
  
  
• Solves State and municipal pension concerns and unfunded obligations
  
  
• Energizes the economy with an immense injection of capital
  
  
• Teaches 50% of Americans about capitalism and stock investing
  
  
• Infects America with the optimism - the Shining City on the Hill"
  
  
• Reduce ethnic and racial tensions by making everyone wealthy
  
  
• An air-tight way to eventually deliver the American dream to everyone
  
  
• Brings back the market to areas convoluted by government intervention
  
  
• Makes America the banker to the world
  
  
• Gets everyone on the same page pulling in the same direction
  
  
• Infects the population with a desire to win and increase stock values
  
  
• Restores America’s confidence in her politicians

Neither opponent nor supporter of RUA can argue that what it proposes is not something the people want for themselves - real wealth, freedom of choice and the American Dream. In the plan the people are empowered and the state will lose some of theirs. Those who believe in the ability of the few to orchestrate the lives of the many are just fooling themselves. The private sector in America has proven that when all 300 plus million Americans are able to invent, design, develop and implement their ideas freely our society prospers socially and economically. That prescription has made us the economic and military giant of the planet with just 4.5% of its population.

RUA will make major adjustments that will enable the individual to reacquire the rights and freedoms lost to the emergence of big government over the last century. It will also let capitalism deliver the American Dream to those that are unprepared to compete at the level necessary to insure them of that dream. This will demonstrate to the world that capitalism is not only a system that delivers wealth to the rich but one that delivers wealth to the poor as well. What socialism failed to deliver, capitalism will. Those that refuse to allow this to happen are doomed to the ash heap of history like all social totalitarians that believe man is so deliriously weak he can be convinced to live in a world of equal outcomes for unequal contributions thereby denying his own natural instincts.

RUA will travel a bumpy road with massive opposition from those whose powers and perks will be taken from them.. There are evil men in this world who will work desperately to keep the poor, poor. When opponents put their roadblocks in the way, ask yourself how it was so simple to give “personal accounts” to politicians, Congressmen, Senators and 3.3 million Federal workers through the Thrift Savings Plan and why is it so unconscionable and "wrong" to give them to you? Ask them why these problems didn’t surface when the legislators gave these personal investment accounts to themselves and government workers?

If it was so simple then, what is the problem now? Their answer will never rise to a level that would defeat the concept that capitalism can deliver the poor from poverty; to Make the Poor Rich. In the plan the people use their own money. The Thrift Savings Plan uses your tax dollars to finance their personal accounts; and they have the gall to tell you that you can’t have one using your own money. What a group of fools we Americans have become if we let this opportunity pass. RUA hopes to empower the people and restore some control over their own lives. To give them back the self-respect and self-esteem they have lost to big government.

And lastly don’t let anyone demean the USA and its capability and its exceptionalism. We have a piddling debt to foreigners of $3.4 Trillion and a country worth anywhere from $220 to $400 Trillion. We can afford to transition to personal "USA" accounts easily. Don't let anyone fool you.

Dick McDonald
July 17, 2011

The Fair Tax Act versus A Personal Accounts Plan (for Laymen)

by Dick McDonald
Ownership Society Institute
www.RiseUpAmerica.us

Rather than get into too many complicated inter-related issues, I am writing this to make crystal clear the main (but not all) of the differences between the highly touted Fair Tax plan and the less understood personal account plan I am supporting and writing about in my book “Make the Poor Rich.”

The Fair Tax Plan

The Fair Tax Plan is very attractive. It scraps all Federal taxes and replaces them with a 23% consumption tax. It eliminates the IRS. It eliminates the need to file income, estate, gift, excise and payroll tax returns. The Fair Tax abolishes them all. Your yearly trek to your tax accountant is eliminated and H&R Block evaporates. No need for copious tax receipts and support; all that is eliminated. Tax cheats who failed to pay their taxes in order to buy more stuff get caught in buying that stuff because the Fair Tax is a consumption tax.

The Fair Tax is based on the assumption that it is fairer to tax consumption than net taxable income which is based on ability to pay. The richer you are the more you pay in our 93-year old system. The Fair Tax doesn’t care how rich or poor you are it just imposes the tax on the new products you buy. It rebates (called a pre-bate) the 23% tax on the necessities the poor buy and exempts them completely from tax as the payroll tax will have been abolished. This is a good thing for the poor, but hardly a bonanza as they are prone to consume every dollar they get.

Under the Fair Tax the rich guy pays nothing except the 23% tax on that which he personally consumes. As he has most everything already, the portion of his income and wealth spent on taxable consumables will only be a fraction of the percentage the poor and middle class spend on taxable consumables. Granted the rich man will invest in the market and create jobs and economic activity which will up overall consumption. That is a good thing but I’m afraid the ordinary taxpayer will complain that the rich get richer under such a plan and the poor and middle class stand still and pay the freight.

The Personal Account Plan

This tax reform ”personal account” plan eliminates all payroll taxes going to the government and diverts them (the 15% which is already withheld) into a taxpayer’s own personal investment account to grow over his 40-year working life by compounding into a sizeable nest egg. As compared to the Fair Tax, the account cannot be reached until retirement as the plan calls for the transfer of the funding of retirement from the government to the individual and the government doesn’t want to have people be irresponsible and spend all their savings and come back as a ward of the state. The nest egg is sufficient in size that just the income off the nest egg will provide the retiree with an affluent retirement. At death, his sizeable estate can be passed on to his children. No other taxes are repealed. However with the repeal of the payroll tax, half of the national budget is eliminated and the need for half the taxes. As those taxes are invested in the economy a substantial increase in economic activity is anticipated.

Comparison of Some of the Features:

• Simplicity
  
  Nothing beats the Fair Tax for simplicity. It eliminates and abolishes all Federal taxes and replaces them with one simple consumption tax. It eliminates the need for a sizeable IRS. It reduces the need for complicated accounting and supporting documents. It eliminates the need for tax returns and the complicated determination of taxable income. Nothing could be simpler than the Fair Tax.
  
  By comparison there would be more complications with a personal account as all taxes stay the same and payroll taxes still have to be determined and paid into an individual’s personal account. In the present Social Security system the government takes care of funding retirement and old-age medical needs. Under personal accounts this responsibility falls on an individual’s shoulders.

  Advantage: Fair Tax

• Limiting the Size of Government
  
  The Fair Tax would substantially reduce the Government’s need to administer so many taxes but HR 25, its empowering legislation, makes this “consumption tax” revenue neutral. In laymen’s terms that means that if the government collected $2.8 Trillion in Federal taxes in 2006, the Fair Tax would be designed to tax the “consumables” subject to this Fair Tax so as to collect $2.8 Trillion in 2006. Therefore it doesn’t limit the size of government to any significant extent. Politicians would still retain the right to allocate that $2.8 trillion of tax receipts at their whim.
  
  The personal account plan would cut the Federal government in half. The Federal budget would fall from $2.8 Trillion to $1.4 Trillion overnight. As the government would no longer be charged with the responsibility of funding retirement and old-age medical needs, it no longer would be in the entitlement business. It would no longer be playing nanny to its citizens.

  Advantage: Personal Accounts

• Tax Cuts
  
  As the Fair Tax is revenue neutral, its imposition would not cut the nation’s tax burden. It would merely shift that burden among the various classes of taxpayers. The poor would be exempt from all taxes and the wealthy exempt from income, dividend and capital gains from which most of their wealth presently flows. Those whose income is spent on consumption over the poverty line would be hardest hit. However, as the Fair Tax is not designed to cut taxes, it is not a vehicle for tax cuts.
  
  As far as tax cuts are concerned, the imposition of full-blown personal account legislation would result in the biggest tax cut in the history of the planet. Eliminating the need for government to fund retirement and old-age medical costs would result in a $1.4 Trillion tax cut.. Unfortunately for those who want to spend their tax cuts now, that money will be put away for them to grow into millions over the years and will not be immediately available. They will be able to direct their investment into pre-designed indexed funds but that is all. Still it is a massive tax cut.

  Advantage: Personal Accounts

• Cost and Logistics of Transition and Implementation
  
  The cost and logistics of transitioning to the Fair Tax would be daunting logistically but not too costly. As the plan is revenue neutral, the federal government would still be raking in the same dough; they would just be in a scramble as to whose ox is gored changing job descriptions and desks.
  
  The transition to a full-blown personal account modality would be painful to those who look at the problem linearly. Today the payroll tax receipts are used to pay retirees. Upon implementation of personal accounts that source of funding disappears as those funds will be placed in personal accounts. The question then becomes how do we fund the benefits of those in the system now and those whose accounts won’t have sufficient time to mature into sufficiently large nest eggs.
  
  In my book, “Make the Poor Rich,” I have at least eight methods to easily accomplish this. None may be needed, however, if history repeats itself. In the 1980s when Reagan cut the tax rate from 70% to 28% the result was that government “income” tax revenues doubled because of increased economic activity. If that happens again and there is good reason to believe it will as the stimulus of personal accounts will pale to insignificance the tax cut of the 1980s then such increase in revenues will be more than enough to pay for the smooth transition to personal accounts.

  Advantage: Fair Tax

• Unfunded Debt Reduction
  
  The Fair Tax hopes to generate sufficient activity to make a big dent in the $13.2 Trillion unfunded Social Security debt. It makes no provision for the looming $30 to $50 Trillion of Medicare liabilities. I personally am unconvinced that it adequately addresses the Social Security problem as the Fair Tax is revenue neutral and present revenues are not adequate to pay the ever-increasing unfunded liability much less reduce the existing liability. It would be necessary to run enormous surpluses under the Fair Tax to even begin to address these unfunded entitlements. Under Fair tax these liabilities remain a severe problem.
  
  The personal account plan abolishes both the Social Security and Medicare unfunded liabilities on the date of the plan’s passage. They are written off the books with the stroke of a pen. Congress is not obligated to fulfill those promises and they have proven that in the Supreme Court. They have no contractual obligation to retirees. They can repeal any laws without consequence.

  Advantage: Personal Accounts

• Retirement Funding
  
  The Fair Tax makes no provision for retirement funding. Taxes presently collected to pay retirees will remain the same and substantial benefit cuts or an increase in the 23% consumption tax will be needed to keep those programs afloat. I don’t see any significant change in the dynamics of a revenue neutral consumption tax that would in any way ameliorate the problem.
  
  The personal account plan has been devised to make the poor rich and able to afford upon retirement an affluent lifestyle and the best medical coverage money can buy just off the income from their nest egg. Your $60,000 a year truck driver retires with a $4.8 Million nest egg and a $40,000 a month retirement check (2006 dollars) without invading his nest egg. He can afford a magnificent lifestyle and buy the best medical care money can buy.

  Advantage: Personal Accounts

• Crime, Discontent and the Pursuit of Happiness
  
  The Fair Tax and its abolition of all the taxes and the bother they create will do wonders for the people. It is a step up in the pursuit of happiness. I question, however, its effect on crime and discontentment. I think it will only marginally improve either of the latter. Its revenue neutrality bespeaks of its failure to lift all boats.
  
  Personal accounts have been designed to make the poor rich; even those who by circumstance or environment can’t compete for the big bucks. It carries them into a paradigm in which they can achieve the American Dream by merely working to survive. As most crime is driven by the lack of money, personal accounts will do wonders in reducing crime. As a disincentive for bad behavior for those who commit crimes for money we will subtract their incarceration costs from their personal accounts when jailed. As the poor get wealthier, both the tenor of life and its crisis will tone down and hopefully mute. Personal accounts and the security they provide should be the ultimate reward in the pursuit of happiness.

  Advantage: Personal Accounts

• Private Sector Retirement Funding
  
  The Fair Tax abolishes the payroll tax and provides Social Security and Medicare coverage assumedly at the same level presently paid. As those amounts are insufficient to provide just enough to avoid starvation and homelessness, I don’t see the Fair Tax helping the private sector fund retirement. As it presently stands business is abandoning fixed retirement benefit plans for 401(k)s which have no mortality pool (not payable until death). The Fair Tax should provide a cushion for corporations to provide retirement plans but I doubt they will do so considering the cost that must be added to their products and services.
  
  Personal accounts are designed to provide in one place all the retirement funding an American needs. He won’t need funding from his employer or employers. He can scrap his 401(k), his IRA. There will be no need with the nest egg he will accumulate under the personal account plan.

  Advantage: Personal Accounts

• Wealth Creation
  
  The Fair Tax is not designed to create wealth. It is revenue neutral and neither cuts overall taxes nor provides for an increase in the capital pool (here we assume the rich will be freer to invest but it should be offset by a reduction from other classes who pick up the shortfall in tax collections).
  
  Personal accounts have been devised to create enormous personal wealth for American citizens; even the poor and uncompetitive will become wealthy. . Under this plan the overall wealth of America will geometrically rise to supply the world with the capital it needs to improve the overall standard of living of the oppressed and unfortunate of underdeveloped nations. Advantage: Personal Accounts FairnessIf by fairness one wants to rid themselves of bothersome details, the Fair Tax is your number. However, as between classes of taxpayers I have concluded the Fair Tax is anything but “fair”. Were it not revenue neutral and created huge surpluses with which to liquidate our unfunded debt. I would feel differently. As it is, it loses my vote. This is of course predictable as it is my passion to implement personal accounts at 15% of income and wages and I am exceedingly biased. I leave it to the Fair Tax crowd to challenge my findings and my conclusions. I doubt they will be sitting on their hands.

  Advantage: Personal Accounts

• Legislative Potential
  
  Neither Fair Tax nor Personal Accounts legislation will go down without a massive battle with the establishment as both are designed to free the individual from the yolk of government. The forces of government are massive and impressive. Fortunately they already have personal accounts which I will use like a rapier to impugn their character and honesty with the American people. I predict they won’t get away so easily this time;. George W. Bush won’t be running interference.

  Advantage: Personal Accounts.

If you really believe in America, read this

The Ownership Society Institute (OSI) has been claiming that its Rise Up America (RUA) plan to reform the US Government, kick-start the economy, immediately eliminate over $100 trillion in unfunded US debt and deliver the American Dream of financial independence to every American is the route the political parties should be taking rather than the present slash and burn Republican plan to cut benefits, services and safety nets or the totally irrational spending spree the Democrats are planning to pursue right into Federal as well as state, county and city bankruptcy.

For those of you unfamiliar with the Rise Up America plan it is based on a simple tax shelter device used by the wealthy that has allowed the likes of Bill Gates and Warren Buffett to amass $50 billion fortunes without so much as paying one dime in income tax. The device is simple – the appreciation in the value of their stock is not taxed currently – or ever if they don’t sell shares and pay the 15% capital gains tax. RUA by privatizing the entire 15.3% of annual payroll tax and allowing it to be placed in an unreachable investment account and invested in the stock market for every taxpayer’s working life will enable every American to become a millionaire at retirement. See tables here. The appreciation in their stock over the years will enable them to escape the current taxation of their gains.

From the chart below one would have to be delusional or fatally partisan not to believe that this is the moment for the people to jump on the RUA bandwagon and institute the RUA plan at every level of government. The expectations for stock market returns after inflation will be over 11% which if it holds would mean the average American family ($50,000 annual income at today’s price levels) would generate a $14, 200,000 nest egg after his or her 40-year working life. Now this sounds too good to be true but that is what the calculator tells us. Remember in 2006 Warren Buffet made $833 million each and every month for the entire year as that was the result of his accumulating stock the appreciation on which he paid no tax. RUA merely adopts that shelter to make the poor rich and the rich ever so much richer.

Dick McDonald, General Manager
Ownership Society Institute
April 6, 2011

Does one man have the answer for America?

I emailed Al Martinez (The Daily News) twice about my friend Dick McDonald...and look what finally happened today!

Al Martinez: "Does one man have The Answer for America?"

PS: Dick has a free e-book on his website called "Make The Poor Rich and America Wealthier" that is over a hundred pages of specific details that show why his plan will save our country. (Please forward to your lists and spread the word!)

Healing the Nation

by Dick McDonald
Ownership Society Institute

The American people are on to politicians and they don’t like what they see. And what they see is a daily diet of talking points that are only 1% solutions at best to their 100% problems. A diet that consists of ideological issues of small versus big government, socialism versus capitalism, deficits versus surpluses, entitlements versus privatization, job losses versus job creation and a whole host of peripheral issues that aren’t of the slightest interest to average Americans.

What the average American wants is a better standard of living for himself and his family and a way to achieve the American Dream of financial independence. Unfortunately they got a Democrat who promised to fulfill those dreams but turned out to be a tax and spend socialist who can only deliver what he steals from the rich and productive elements of society. He turned out to be a one-trick pony just like all totalitarian-socialist dictators are.

So how do we heal the nation?

The Democrats claim to socially represent the underdog in America but in reality tax them unmercifully with payroll, sales, energy, property taxes and in some cases income taxes. Tax them to the point they can’t save a dime. The Republicans, on the other hand, support the rule of the jungle – survive on your own or die. Neither party has done anything significant in decades to elevate the prospects of the underclass.

The Democrats promote bigger government to impose their policies; Republicans pretend to champion small government. However, to really understand how to heal society we have to contend with the libertarians – they want no government control of any aspect of the citizen’s life. And that is the building as well as the stumbling block to crafting a solution for our national problems.

As a starting point let’s take aspects of the Democrat and Libertarian views and compromise. The Democrats want the common man to thrive (those Democrats, Socialists, Communists that are really interested in delivering the “common good”) so let’s privatize payroll taxes and give each taxpayer back the 15.3% in taxes he pays. That will satisfy the Libertarians too – it will get the government out of the individual American’s business.

However, the Democrat will rightly point out that ordinary Americans are not prepared to invest in their future and in most cases will spend all that 15.3% currently and not save a dime. Eventually they will become a ward of the state and make the privatization of their payroll taxes a useless exercise.

This is where the Libertarian will have to compromise with the Democrat and restrict the individual from spending that money during his lifetime and put it in a non-governmental trust to accumulate and compound into a sizeable nest egg for retirement. Although the taxpayer can’t use the money before retirement, it is his and no one else’s.

Now having done the “common good”(satisfying the Democrat) and freed the individual from confiscation by the state (satisfying the Libertarian) – the Republicans and their capitalism come into play. By privatizing the $1.3 trillion in annual payroll taxes and investing them in the stock market the economy will explode and send the market indexes like the DOW and the S&P 500 right through the roof.

Tens of millions of jobs will be created by the private sector.

More importantly the people will have a Congress that worked for them. The average household at today’s prices will accumulate a $4 million nest egg at retirement and $33,000 a month retirement check. Today the average American can look forward to a monthly Social Security check of $1,300 and no nest egg whatsoever.

Now there are those that say the market is too risky – “look what happened to the DOW”. It is down to 10,000 from a high of 14,142. What these critics forget is that a 40-year investment started 40 years ago with the DOW at 800. The average rate of return is approximately 10% per year for 40-year cycles since 1871. So much for “risk”

Then they will say we can’t afford to pay off everyone under the old programs. That is nonsense. Privatizing these programs will generate enormous economic activity and increase “income tax” receipts to the point the excess generated can pay off older participants within three years. Remember privatizing will immediately extinguish today’s $111 trillion of unfunded debt upon enactment.

With one national pension plan the cities, counties, states and the federal government will be free of those costs and able to survive the current bankruptcies they have created. Look – instead of a $15,000 Social Security pension the average household would be looking at a $400,000 a year pension. Even those government employees that enjoy $100,000 a year pensions would greatly benefit by privatization.

The Ownership Society Institute (OSI) has developed a complete plan, Rise Up America (RUA), to increase retirement benefits and rapidly create wealth for all Americans. You can access this plan here or type www.riseupamerica.us into your browser.

America is going transform. It is just a matter if it plans to implode in terminal socialist bankruptcy or thrive in capitalist-delivered wealth.

Rescuing Blacks from the Slavery of Dependency

Dick McDonald Ownership Society Institute

On his program yesterday Fox’s Glen Beck was criticizing Democrats for the debilitating effects of big government dependency on the African American community. One of the all-black panelists put forth the idea that the disintegration of the black family may have been the root cause for the increase in dependency inasmuch as only 20% of black children were born out of wedlock in 1960 whereas today that figure has sky rocketed to 80%.

Glen noted that Bill Cosby had brought this up before but got hammered for it. He asked Brandon Brice (a community organizer and a Republican) for his comment. Brandon opined that Cosby had called for black males to be more responsible - he then made a 360 departure, changed the subject and said the following:

The more important thing when we look at things as Republicans and conservatives and when we talk of the fear of big government we have to remember that big government whether you like it or not - it’s the perceived notion that they are taking care of much of low income America right now especially at this time of depression. Maybe the solution should be a smarter and more responsible government and I believe that if that happens what you will have – you will shift to automatically smaller government because it will be based on principle. Right now much of the low income neighborhoods are dependent on this so you can’t speak against something that is supporting the lower masses whether you like it or not.

The community organizer hit it right on the head. Unfortunately it flew right over Beck’s. Brice opined that a smarter government would use principled legislation which would naturally result in a smaller government. Voila- an economic solution to poverty. That is what our Founders bequeathed to us. If the government were smaller the taxes taken from the people wouldn’t be so great and they could use that extra money to grow the economy and create and compound their own wealth.

Unfortunately instead of pursuing an economic line of reasoning Beck and the panel headed off into a rehash of the “social” effects of dependency. They eventually compared the black community to domesticated dogs who had to rely on their owners because they were never taught how to survive on their own. What a sad analogy – and from an African-American panelist yet.

The panel didn’t pursue how being smarter and more principled could possibly lead to an “economic” solution to poverty and the eradication of this endemic condition in so many parts of the black community. It was just another chance Beck missed to uncover a solution – a wall he butts into almost daily.

To change a cultural dynamic like poverty you have to have a reason for blacks to make a change. So why in the world would the black community presently vote for Republicans when Republicans have nothing to offer but the admonition to be “responsible”? Do Republicans believe they can shame blacks into voting to cut off their free food, free housing and free health care by proving that Democrats are corrupt capitalists posing as socialists? It hasn’t worked in the past and it won’t work in the future save a massive change in the Republican political arsenal. Today Republicans are not even a perceived threat to blacks as they have been accommodating blacks for years by appeasing the entitlement cabal that has run up a $118 trillion debt.

So what is a smart principled legislature? Well it is one that knows a $118 national funded and unfunded debt is unsustainable and moves to extinguish at least the $110 trillion portion that represent entitlements. It would repeal and replace entitlements (or the “free stuff”) with programs that use capitalist principles to eradicate poverty, lower taxes and increase benefits. No matter how daunting a task this appears to be on the surface, it is doable today without sacrificing the relatively paltry benefits government presently doles out in entitlements nor cost a dime more than the taxpayer presently pay. The people would continue to be paid their full entitlement benefits required by law today as they would be legislated as a “safety net” under which no future benefits would fall. .

Increasing benefits like Social Security’s monthly check from $1,000 to $33,000 seems like a pipe dream. How could a legislature do that? Actually it can be done quite simply by removing the government from the equation - by privatizing Social Security, Medicare and Disability and letting the taxpayer keep the 15.3% in payroll taxes presently confiscated from him or her and letting them use those funds in a personal investment account to grow and accumulate over the years into a nest egg. Let’s take a simple example.

The average American household presently makes over $50,000 a year. That means they pay over $7,500 a year in payroll taxes. Over a 40-year working life that $7,500 amounts to a contribution of $300,000 to the government for which the taxpayer gets no nest egg. However, if those payroll taxes were the taxpayer’s own money and invested weekly in the stock market for 40 years the average nest egg accumulated would be $4,000,000. Just the earnings off the $4 million in the 41st year would equal $33,000 a month.

If you doubt these figures go to the tables on www.riseupamerica.us and review them. Even low-income taxpayers will end up with million-dollar nest eggs and tens of thousands in monthly retirement checks. As a policy matter individual and national wealth will accumulate and grow as it is willed from one generation to the next. We call the plan the Rise Up America plan (RUA) and the personal investment account a “USA” - universal savings account. It will end endemic poverty in the black community.

RUA and the USA are the type of tools it will take to motivate blacks to vote for Republicans and vote for capitalism. Today we have blacks like Oprah Winfrey mistakenly touting Denmark and its socialist government as the answer black Americans are looking for. When the richest black woman in America who has reached that pinnacle through her understanding and use of capitalism starts promoting socialism Republicans should wake up to the fact that they need to offer the black community more than an encouraging word to be more responsible. They need a pocketbook issue like RUA. It can be the one that ends black dependency on government.

Let’s Finish Off Socialism

Dick McDonald, Ownership Society Institute
www.riseupamerica.us

Over 200 million Americans marched in spirit along with the 20 million Tea Party participants today all over America. They marched today against socialism, the President, the Administration, the media, academe, ACORN thugs, SEIU goons and a Democrat-controlled Congress that has been passing anti-American, anti-capitalist, anti-free market laws and regulations that Americans violently oppose.

Americans have never tolerated anyone much less a President of the country that calls them names and says he is going to change America to his idea of what it should be. That is not what America is all about. The people say what will be.

Over the last several months Americans have come to realize their Great November Mistake. They elected a man who plans to take property from the productive and redistribute it to the unproductive in concert with principles of Karl Marx and the communists except in cases where his financial supporters are concerned – he is mainlining taxpayer’s hard earned money and property directly to them in a corrupt and criminal way.

President Obama, their old lawyer, allocated ACORN, a criminal conspiracy that is up on voter fraud in over ten states, over $8 billion of stimulus money because they helped elect him. Well this week 20 year old Hannah Giles ripped that $8 billion from the hands of those criminals by playing a prostitute and pulling off the greatest sting operation in American history. ACORN was immediately dropped by the Census Bureau and if any Federal funds ever go to ACORN again the people will punish Obama and his party unmercifully at the polls in 2010. They may even try to impeach him if he tries to pull that stunt again.

The President made a speech on Wednesday where he told so many lies Congressman Joe Wilson lost it and shouted out that the President lies. Magically the loophole that would allow aliens to get free health care under the proposed bill the Congressman was referring to was immediately closed by amendment the next day.

If nothing else the Democrats are on the run. The American people will not tolerate having their freedom, liberty and most importantly their property confiscated by radical Marxists socialist communist leftists. It just isn’t going to happen any more. They have had enough of even the semi-socialist nonsense.

The question we at the Institute pose now is why not rid ourselves of socialism and socialist practices once and for all. Let’s strike while the iron is hot. Republicans, Democrats and Independents who are opposed to socialism should adopt the Institute’s Rise Up America plan and return the control of the government back to the people along with half of the taxes we presently pay.

The plan while destroying socialism will simultaneously revive the stock market and the economy, extinguish the $59 trillion in entitlement debt, deliver the American Dream of financial independence to ordinary Americans and trigger the greatest period of wealth creation the planet has every known.

The people need a banner to fly under. The tea parties lack a unifying cause to champion. I suggest the Rise Up America plan and the “USA” the Universal Savings Account where the future millions of all Americans will be accumulated.

If activist Hannah Giles can save us $8 billion just posing as a prostitute and Joe Wilson can save us literally hundreds of billions in health care costs by publically calling the President a liar then why do we shrink from taking down socialism, communism and other collectivist practices. It only seems like the rational thing to do at this moment in history.

Think of all the people we will rid ourselves of in Congress – Reid, Pelosi, Waxman, Dodd, Frank, Durbin, Conyers, Sharpton, Watson, Waters and 200 other losers.

Why not attack and take them down now? If not now, when?

Please go to our site and help out!

www.riseupamerica.us

Democrats Bleeding Taxpayer’s Dry

A Republican Solution

by Dick McDonald, Ownership Society Institute

The $780 Stimulus Bill was rushed through Congress so fast no Senator or Representative ever read the bill. President Obama assured us that it was the economic stimulus that would keep unemployment under 8%. Now that unemployment has raced past 9.4% just a few months later the Democrat-controlled media is still refusing to tell the American public the truth about Obama’s gross mismanagement of this stimulus package. To date only 15% of the funds have been spent and only 1% on the job-creating shovel-ready job-creating infrastructure projects. To say President Obama is an incompetent is to insult incompetents everywhere.

So where has the 14% gone? You guessed it – to pay the salaries and pensions of state, county and city employees. In other words to keep government employees and their unions “paid off” instead of laid off like the private sector has had to do. No wonder no jobs have been created – this Marxist-in-Chief is creating a depression he thinks he will solve like FDR. The only problem is FDR had a 14% unemployment rate on December 7th, 1941. He never solved the depression – World War II did.

The City of LA, like all of California, is bleeding from over-spending by Democrats. Recently they “solved” a current departmental wage crisis by giving early retirement – at 55 years of age – to over 222 government workers at 90% of their last year’s salary. As those salaries averaged $100,000 a year the 30-year cost to taxpayers will be $2,700,000 plus COLA for each one of the 222 workers. This is where the Democrats have driven the economy – into paralysis by their mobs of inside-the-government workers padding their own paychecks and retirement out of your dwindling wealth.

And the American public hasn’t got a clue. The Democrat-controlled media no longer investigates – it merely is a propaganda machine – blindly driving us straight into a wall.

Now do you get it. This is where your stimulus tax dollars are going. Not to stimulate the private sector economy where the people are but to the government employees and their unions. The stimulus is not creating jobs as Obama promised – it is feather-bedding government employees. It is similar to what Democrats did in allowing unions to blackmail the auto companies into bankruptcy by underwriting $150,000 a-year manufacturing jobs. Obama, the Congress and the state assemblies are stealing from the taxpayers to fill their own purse.

This is not a free country anymore. It bears no resemblance to the country our Founder’s created. It is a totalitarian regime of Democrat elites unmercifully taxing ordinary Americans to fill the pockets of their ruling class of government employees. Using the lie that they are for social justice, Democrats are pushing ordinary Americans – especially the “little guy” they claim to represent further and further into poverty and despair.

The Republicans are bleating that all of this is unfair but no one is really listening to them because the Bush regime ran up big budget deficits and created income disparity that dramatically illustrated the distance between the ordinary citizen and his American Dream. Of course Republicans are banking on Obama’s failure so they can take over Congress again in 2010 and return the country to it normal semi-socialist state which will still leave ordinary Americans penniless and the country with a $60 trillion unfunded entitlement debt.

There is a “solution” to this madness. We will have to take the Republicans to the woodshed and whip them to within an inch of their life so they will consider doing something for the “little guy.” Patriotic Democrats embarrassed by 70 years of unfulfilled promises to the poor should all come on board.

Every American deserves to keep and invest his own money in the fabulous American economy and over a lifetime generate a million-dollar nest egg with which to retire affluently. He shouldn’t have to be highly educated just reasonably industrious and stable during his lifetime. The Founders would have endorsed that philosophy.

We at the Ownership Society Institute have developed such a plan. It involves the creation of a national pension plan in which governments (Federal, state, etc) will no longer have to impose those entitlement taxes (Social Security, Medicare, Disability and the many state and local taxes) on the people and industry will no longer have to provide their employees with supplemental old-age medical or retirement plans. Each individual taxpayer will retain ownership of his “payroll taxes” and automatically invest those funds over their working life into the economy to grow into sizeable nest eggs with which to retire.

The plan is called the Rise Up America(RUA) plan and as an added bonus it will immediately turn our potential depression into the roaring free-market economy. It will do this by infusing monthly over $125 billion of “new” investment capital (those payroll taxes) into the market to grow it algorithmically. Besides being the biggest tax cut in history it will cut the national budget in half and immediately retire over $50 trillion in unfunded entitlement debt. The old Social Security, Disability and Medicare benefits will never be reduced again but will remain as the floor under which no future RUA benefits can ever fall.

Think about the relief our government and industrial complex will experience when they no longer have to finance pensions and old-age medical cost. Think about the taxes we won’t have to pay to the Federal, state and city governments. With the guarantee of sizeable nest egg everyone needn’t demand such exorbitant salaries during their lifetime to fund their own retirement.

The states of California and New York are presently hemorrhaging. RUA is the tonic that will remedy that hangover.

RUA has devised many ways to transition from our existing programs to RUA’s plan. All methods will result in the increase of national wealth in such a great amount that the value of the US dollar will naturally increase. The infusion of such great sums of investment capital into the market will also substantially increase “economic activity” to such an extent that income tax receipts should double within four years allowing excess tax receipts to cover legacy entitlement costs with amounts left over to reduce the national debt.

Of course RUA needs national exposure. We plan to finance that campaign by contributions by patriotic Americans willing to go back to our Founder’s principles to revitalize the country. We need everyone’s help to spread the word and need everyone’s help to fund our publicity campaign to inform all Americans that investing 15.3% of their working life income for a no nest egg whatsoever is a grossly unfair Ponzi scheme that has be stopped. RUA is the plan to stop it. RUA substantially increases retirement benefits – 20 to 40 times more than current Social Security checks and a massive decrease in taxes taken by our government. It will also make our country a more stable and vibrant wealth creating machine.

If you are a patriotic American worried by the direction our country and its economy is headed and want to do something about it contact Dick McDonald at 818-998-6800 for instructions how you can help.

To more fully understand the scope and workings of the Rise Up America plan go to www.riseupamerica.us. You and your patriotic friends can contribute there and get a copy of free e-book that is the blueprint of what we hope will be the most significant economic change in the 21st Century.

Rise Up: Reclaiming the American Dream

The Question and Answer

Social Security was created in the 1930’s to help elderly Americans fund their retirement. But now we're left with this question – is the way they decided to fund it the best way to do it today? Social Security and Medicare are both technically bankrupt. With the pay-as-you-go method, there won't be enough working people to pay for the system. It's unsustainable.

Welcome to the Rise Up initiative; no new taxes, no cut benefits, no temporary fixes. Rise Up will maintain benefits for retirees, greatly increase retirement benefits for the future, slash taxes, put money back into everyone's hands for they and their children's futures, and eliminate the $58 trillion unfunded Social Security and Medicare liability.

This Plan Will...

• Generate the biggest tax cut in history
• Reduce the size of government by half
• Alleviate poverty and economically emancipate lower class citizens
• Infuse enormous sums directly into the economy and accelerate growth
• Eliminate the need for government pensions and Medicare
• Pay off all $58 trillion of unfunded Medicare liabilities
• Give back to Americans the money that they earn
• Increase the economic opportunities of all Americans

Why It Isn't Working

When Social Security and Medicare were originally set up, they were intended as retirement programs and never designed as safety nets. Contrary to popular belief, the programs are not a fund that you pay into as you work and draw on when you retire. It's pay-as-you-go, with taxes from those working paying for the benefits of those retired. When the system was first set up under FDR, the program was small enough and the number of people working large enough to fund it, but since that time both the coverage of the program and the percentage of people retiring have increased, making the burden heavier and now unsustainable. As of today, future benefits to be paid out will exceed anticipated payroll taxes by $58 trillion. That's a debt of $188,000 for every man, woman and child in America or over $500,000 for every household.

Unfortunately politicians haven't addressed the problem, preferring to kick the can down the street to future generations. In the next few years the anticipated benefits will outstrip what payroll taxes can fund, which means we either impose new taxes on workers or we reduce the benefits everyone receives at retirement. But there's another option: Rise Up will let us climb out of the hole we've dug ourselves into, substantially increase benefits and dramatically reduce taxes.

How This Works

Rise Up redirects the 15.3% payroll tax paid by individuals (and in the case of employees, their employers too) into a personally-owned investment account that will grow over their working life. The funds are invested in safe indexed stock funds that have historically been growing at over a 10% rate since 1911. It will not affect current checks for retirees - the enacting legislation guarantees zero reduction in benefits and those benefits will be backed by the government. In fact, those benefits may be increased over present levels. Seven important principles make Rise Up work:

I. Convenience: For those people who can’t manage their own money, contributing to the capital pool for investment is automatic.

II. Constancy: It won't cost the taxpayer one dime more than it does now – it will be the same 15% deducted for payroll taxes now paid for by the taxpayer and his employer or just the taxpayer if he is self-employed.

III. Security: The taxpayer’s funds are are unreachable by politicians, Congress, taxes, courts, or anyone else. No one, no entity, can invade the taxpayer’s personal account during his working life, giving it the opportunity and time to grow.

IV. Stability: As a minimum all present and future retirees without the time to accumulate their nest eggs are guaranteed to receive from the government the same present benefits paid under Social Security, Disability and Medicare for the rest of their lives.

V. Neutrality: The taxpayer’s funds will not be managed by stock brokers or investment houses; the trust will merely invest in already existing stock indexed funds directly bypassing the cost of Wall Street advice, management and tricks.

VI. Choice: The taxpayer will control which stock funds his or her money is invested in during their working life. These funds will track the steady upward movement of the market and grow with our economy.

VII. Safety: The funds will not be invested in risky stocks funds They will contain hundreds of quality stocks and avoid having one or two or even a group of them crash the whole account.

Balancing the Present and Future

Rise Up will direct Federal payroll taxes to be placed in the Personal Pension Investment accounts (PPA) of each particular taxpayer while also providing for the funding of all benefits of existing Social Security and Medicare beneficiaries. How is this done?

A dollar a year invested for 40 years compounds into $442 at a rate of 10% per year, whereas printing 40 dollars over 40 years generates only a $40 currency dilution, or $40 more dollars put into the total money supply, making each dollar worth less. The PPAs will grow over time to the point where in 40 years they will be 11 times greater than the actual currency dilution if all benefits had been paid for 40 years by printing money.

In the short term, the infusion of massive amounts of new capital into the stock market will substantially increase economic activity and double Federal income tax revenue within three to five years. This increase can be used to pay the benefits due under the old entitlement plans and reduce the need to use printed money.

There are also numerous other ways to fund the old entitlement benefits other than printing money or using taxes, such as privatizing public lands, buildings and other government facilities. As older participants pass out of the system, the old entitlement liabilities extinguish themselves. And depending on growth patterns, the PPA will be sufficient after 15 to 25 years to fund benefits equivalent to those guaranteed under the old plans, taking away the need for calculation of unfunded liabilities.

Our Economy

A free market relies on an ever-increasing pool of capital with which to grow and prosper. Unfortunately, punishing taxation, suffocating regulations and artificial "stimulus" packages funded by government debt, borrowing, and future taxes puts a drain that capital, stunting economic growth. The money infusion by PPAs represents the investment necessary to rapidly grow the economy.

PPAs, by investing in stocks, will add $100 billion a month to the economy, or $1.2 trillion a year, with no new taxes, government spending, or more borrowing to pay for that spending. That's $1.2 trillion a year of new investments, new businesses and new jobs. The multiplier factor will take that annual $1.2 trillion and create a least $6 trillion of new GDP and millions of new jobs, throwing the economy into over-drive. And every working person, from the richest to the poorest, will be able to put away money. But what will that look like?

Average Americans

In recent years the average American has not been saving but spending all their income just to stay afloat. With Rise Up, that all changes.

The average American household makes over $50,000 a year and pays over $7,500 in payroll taxes. In plain math, that $7,500 invested each year in the stock market, earning 10% a year over 40 years, will generate a $4 million nest egg that throws off a $33,000 a month retirement check without touching the trust, which can be passed on to his or her heirs. After 40 years, a janitor making $20,000 a year can expect $1.6 million, a technician making $40,000 can expect $3.2 million and a truck driver making $60,000 can expect $4.8 million. That's the real math. Compare that to current programs, with no nest egg at all and only a paltry monthly check. Rise Up takes money out of the hands of government, so that hard-working Americans can fully realize the American Dream.

Rise Up America

A unique tribute to Jack Kemp

Jack Kemp and the First Phase of the Supply-Side Revolution

Obama's Killing Field

by Dick McDonald

I have developed a marvelous plan to increase Social Security and Medicare benefits while at the same time substantially reducing the overall tax load all Americans bear - www.riseupamerica.us

The major resistance to my plan has been older people worried about losing their monthly Social Security check. If what Charles Krauthammer suggests in Obama: The Grand Strategy - that Obama’s plan is to pay for the trillions his socialist agenda will cost by a clever withholding of medical treatment to people in the last six months of their lives - then older people have something more serious than losing their Social Security check to worry about - like losing their life - in Obama’s modern version of the killing fields of Cambodia.

Death-by-delay has already been adopted by other state-run medical plans like those in England and Canada. Genocide by bureaucratic fiat is the norm. As fully a third to one-half of medical costs occur in the last six months of life withholding life-saving or life-extending procedures during that most painful period in one’s life appears to be the social justice Obama has in mind. The costs saved by withholding approval of treatment will run into the trillions. And Obama has to have trillions to pay for his socialist scheme of redistribution presently being legislated by a Congress either completely blind to Obama’s treacherous plan or complicit in implementing it.

President Obama and even Charles Krauthammer fail to realize that there is a more elegant solution to the Social Security and Medicare dilemma than raising taxes, reducing benefits and/or withholding treatment. That is to continue current programs as the floor under which no benefits can fall but change the funding to one in which the $1.5 trillion presently being withheld from citizens is placed in Personal Pension Accounts (PPA) owned by each taxpayer and involuntary invested by them in indexed-stock investments for their working life to compound into millions to allow them to self-finance the last months of their lives as well as enjoy an affluent and healthy retirement. See the above link. The fact that such a plan would solve our current economic crisis is just an added bonus.

Those of us complaining about the enormity of the debt Obama is incurring with our tax dollars and those of our children might start worrying about the genocide of our older folks. And if you are one of those older folks you might want to start worrying about Obama’s plan to withhold that heart bypass, hip replacement or kidney transplant you may need. That is the price one pays for installing a universal health plan run by heartless bureaucrats that kill by withholding treatment because a guy like Obama has decided you are not worth the cost.

Obama: The Grand Strategy

www.riseupamerica.us

America Has Already Paid Reparations

by Dick McDonald
www.riseupamerica.us

On this day of remembrance of Abraham Lincoln – the REPUBLICAN that freed the slaves – we should abide by his warning:

You cannot build character and courage by taking away a man's incentive and independence. You cannot help men permanently by doing for them what they could and should do themselves.

IF we follow his advice we will destroy socialism and retain a free market capitalist system. The dependency state Obama is building is just another form of totalitarianism – a totally criminal enterprise.

If, as he has hinted, whites owe Blacks, and if he pushes for reparations, tell that no-good socialist that America has already paid its reparations: One white American died in the Civil War for every 5 black slaves free. Got that? One white American – not some enemy combatant – died for every 5 slaves.

That should be reparations enough.

Social Injustice in America

by Dick McDonald

America fails to educate its people. From grammar school to universities, from the streets to executive suites two generations of Americans have been taught that capitalism is basically an unfair economic system and that academe’s utopian solution of social justice is the answer.

Much of what the educators want is admirable and justifiable. It is the manner in which they want to achieve those goals that is socially and economically unjust. In fact it is downright collectively stupid. The means to their end is taxing the rich and productive and redistributing that wealth to the poor and unproductive. Of course they no longer call the poor “poor” but middle-class. It is a classical diversion of a failed political policy to use words to divert attention from the reality of their failure.

What kids need to learn; what they need is a course in taxation. What Americans don’t seem to get is that academe has steered Americans away from basic civics to social justice themes. Graduates have no idea how our country works economically –what the burdens these “socialists” want them to carry. Let’s take a simple example.

Jay Leno was interviewing Anderson Cooper on the tonight show this week. Cooper of CNN was gushing liberal social justice themes to which Leno replied that he would gladly pay more income taxes if the money got to the right people. Now dear reader what do you think Leno is doing today with the money he is planning to give to the government tomorrow? It is likely he is pouring it into his personal stock or bond portfolio. If he diverts that money from the people’s capital pool to the government he is destroying the funds the economy uses to create jobs and start businesses.

What Anderson Cooper failed to tell Jay Leno was the rest of the story - the serious depletion of the capital pool Barack and his mates have in mind. He and the liberal Congress is eyeing a big money contribution from the likes of Leno. If NBC is paying Jay $20 million a year the 4.5% increase from a top rate of 35% to 39.5% will only cost Jay an additional $900,000 – mere petty cash to the likes of Leno. What was not said is that Obama has promised to lift the cap on Social Security, Medicare payroll taxes which will cost Jay an additional $3.4 million dollars a year. That is $3.4 million dollar less for the capital pool to use to hire the “middle class”. And Jay is just one of millions of the “rich” that will be so impacted.

Obama promises to keep the Ponzi scheme known as Social Security and Medicare from bankruptcy by imposing this punishing 15.3% payroll tax on top of the 39.5% income tax rate. The “middle-class” has been convinced that is fair. What they fail to realize is that every action has a reaction going in the opposite direction with equal force. That tax will throw millions of Americans out of work. It will be a repeat of the 10-year depression of the 30’s when unemployment remained at double digits. You see the “rich” didn’t have the money to hire people – their capital pool was empty. The rest of the story is that Obama is taking us down the same drain hole.

So folks enjoy the euphoria of “the change people can believe in” because it has a short shelf life. It is built on the stupidity of those who think they can vote themselves a paycheck they didn’t work for. Obama’s words are temporarily most comforting “we are the people we have been waiting for” meaning ordinary people like Obama is what ordinary Americans have been waiting for. Unfortunately his policies will result in a pink slip for many Americans and a malaise in our economic engine just to send out that “social justice” welfare check.

For another way to skin that pig see www.riseupamerica.us – the “real” blueprint people have been waiting for. You can even download a free book Make the Poor Rich and America Wealthier.

Capitalism for Dummies

Dick McDonald
www.riseupamerica.us

Socialism is no longer “creeping” in America, it promises to start “galloping” with the election of a veto-proof Democrat Congress in November. America is no longer “slowly” becoming a nanny state paralyzed by big government and their entitlement industry it is fast becoming socialistic and increasingly seduced by the very thing President Reagan warned us against – “government is not the solution, it is the problem”. Today our schools, our media and the Democrat Party are preaching the lie that big government is the solution and individual freedom is the problem.

Such propaganda has led so many Americans to no longer equate capitalism with freedom. The enormous success of Reagan’s supply-side revolution that created so many billionaires is now being used to illustrate the failure of capitalism rather than its success. Instead of trying to bring more capitalism to ordinary Americans the people have been led into believing the proposition that taking from the rich will somehow make the poor richer. Nothing could be further from the truth – economic leveling is a myth oft repeated by charlatans seeking power over the masses. The eventual economic paralysis of the USSR proved that “equality” of outcomes is the poison that destroys individual freedom.

How have so many people who want to be financially comfortable as individuals been seduced into believing that socialist policies of big government will be the magic pill that will deliver the American Dream? The answer is simpler than you think. All education begins at home and too many American parents have flunked that exam. They have abandoned teaching their kids the basic principles of free market capitalism and turned over that responsibility to the educators. Unfortunately by method of design our educational establishment quit teaching capitalism and started seriously emphasizing socialism during the 1960’s “revolution”.

The truly crippling effect of socialism is that it takes money out of the economy and wastes it on entitlements. Entitlements grow as they have in France, Germany and England to the point they drain the economy of the investment needed to grow and create new business and support innovation. The people of Europe have seemed to have caught on to the fact that it was they themselves that have voted the country into paralyzing stagnation and as a result have recently elected conservative governments to reverse that trend. Unfortunately America seems headed in the opposite direction.

The simple fact of capitalism is that it takes capital to keep the country growing and the people prospering. As our national income is the fountain of that capital it is not surprising that investment capital is so scarce today. The American people no longer save and have been relentlessly consuming all of their income. This has led American venture capitalists to seek investments from off-shore sovereign wealth funds. These factors together with “galloping” socialism are prescription for economic paralysis.

The simple fact is there is an enormous untapped pool of American domestic capital just waiting to be turned into investment capital. It is presently being annually consumed by the entitlement industry in Washington DC. It is payroll taxes confiscated from American worker that should be invested for him or her in the American economy to grow into hundred of trillions that will make each American a millionaires after a 40-year working life. The total payroll tax bill of over a trillion dollars each year if invested in the economy would explode the prosperity of the country and each of its citizens. Then again they would have to understand capitalism and academe, the Democrat Party and their minions in the media have hidden that information from ordinary Americans. And as they never learned it from their parents or their teachers, the American economy is headed for further stagnation and continued poverty all because of ignorance – possibly planned ignorance by those betting on socialism.

Capitalism and privatization can solve poverty and turbo charge the American economy. Remember privatization is what people want. They want their money back from government and want to use it themselves. If you are interested in capitalism and how America can be transformed into a vibrant and prosperous nation of domestically tranquil people go to www.riseupamerica.us and learn how easy it can be - and join the revolution.

Today's American Revolution

The American Revolution – Part II

Dick McDonald
www.riseupamerica.us
www.dickmcdonald.blogspot.com


America was the first country in the world to attempt to cripple “Big Government”. It started a Revolution to free itself from a tyrannical big government - a government headed by a King who had imposed taxes on the American colony to fight a war with France. Taxation without representation was the rallying call of our patriots.

Eleven years after declaring its independence, America signed a pact with itself to be ruled by a constitution - a compendium of laws designed to put the individual in charge of the state. It established rights of individuals and prescribed limited powers to the central government. The Founders realized that a country governed by its people had a better chance for survival and success than any form of totalitarianism.

One of the most important feature of that document was that no taxes were imposed on the income or wealth of the people thereby assuring the population that “big government” would never again emerge to confiscate private property. The Founders believed their Constitution would insure freedom and liberty for all through capitalism. Capitalism was and is the economic discipline used when countries transact business with each other and the Founders made that the economic standard in America in transactions between its citizens.

That was then and this is now. The Constitution has been amended and slowly but surely the American people have ceded their power to the state and become powerless to force the politicians to work on their behalf – exactly what the Founders didn’t want to happen. The majority of Americans find themselves unable to live comfortably, pay their taxes and still save for retirement. Politicians have damaged the American economy with laws that suffocate capitalism. That is particularly true for the poor and middle-class in America. As a result today they are so frustrated by political inertia they are willing to let socialists and Marxist further cripple capitalism by expanding “big government” through punitive taxation on the "rich" members of society in hopes of finding a solution to their dilemma.

Considering that frustration many say that the 2008 election will usher in a new chapter in American history. They conclude that America had its collectivist cycle with FDR that lasted from 1932 to 1968 and the individualist cycle with Reagan that has lasted from 1968 to 2008. Many believe that America is again going to call on big government collectivists to run the American economy in the next term.

We believe that electing Democratic socialists is the worst possible solution to the plight of the ordinary American. It is no solution. The Democrats talk the talk but don't walk the walk - they just promise the American Dream but never deliver it.

In the American Revolution Part II the stakes are a lot higher than electing Democrats or Republicans. America has to reform a good part of its economic system to fix what is wrong – to achieve what the people really want and logic demands. The country is the most successful on the planet but it is only running on one cylinder – the country should be a lot wealthier and every American should be a lot closer to achieving the American Dream of financial independence – a whole lot closer.

History tells us that Democrats and Republicans have done nothing to really improve the lot of the poor and middle-class in America. Sure America has the richest poor people and the biggest middle-class in the world – but why should that be our benchmark. Too many are still poor, have no property and fewer prospects of achieving the American Dream than ever before. Through the combination of the Federal Reserve fueling inflation by printing too much money and the punitive taxes the poor and middle-class have to pay ordinary Americans today have no chance to reach that dream no matter which party is in power.

Common sense suggests that if the poor and middle-class were wealthy they would be able to afford things like retirement, higher education, higher gas, energy and food prices, their own home and the rest of those things promised in the American Dream. So what history can America call on to prove that it can solve this dilemma - solve poverty? We have ample proof that communism, socialism and big governments can’t – they never have. So what will work?

Believe it or not capitalism has proven it can solve poverty. We just need to start with those who became rich using capitalism. In the late 50’s I entered the tax field and the second income tax return I prepared was for the planet’s only billionaire – J. Paul Getty. Earlier this Spring Forbes magazine disclosed the names of over 1,000 billionaires mostly earning that status in the last 25 years. What happened to change the American economy so radically that it was capable of creating so many billionaires (those with over 1,000 million dollars)?

What happened was a massive change in the way the big government taxed the income of Americans. It was the first phase of supply-side economics. I call it the first phase because I hope the American Revolution Part II is the second phase. I consider these phases part of the return to what the Founders envisioned for America – a people free of taxation on income - free to use that money to grow the economy and improve their own living standard. This is what happened.

Twenty-five years ago the top income tax rates were dropped from 70% to 28% allowing the people to keep and invest more of their own money. In 2002 the government dropped dividend tax rates from 35% to 15% making investment even more attractive. Many people took advantage of these breaks invested in the economy and created an absolutely enormous class of wealthy Americans. Ordinary Americans call them the “rich”. By letting them keep their own property capitalism eventually made them rich and the country wealthier.

All of which brings me to the American Revolution – Part II. Let capitalism make the poor and middle-class wealthy too. Empirically capitalism can do it and do it easily. Now in your wildest dreams do you think the majority of the American people would buy into that plan – a plan that will make them wealthy? What are their prospects now?

They have been fooled into further “economic slavery” and an impending era of limits by their supposed advocates in the American socialist movement. Their champion, a street-organizer is a one-solution fits all kind of politician – tax the rich and redistribute that money to the poor and middle-class. Unfortunately his plan won’t work – Democratic socialism never has and never will. The poor and middle-class will never achieve the American Dream for the simple reason – that under Democrat rule they will never get a pool of capital to benefit from capitalism.

If I didn’t make it clear, American history is proof positive capitalism can solve poverty. The surge in America wealth in the last 25 years was triggered because the state stopped confiscating more than half of the income of the American taxpayer. Many invested that extra money and let their profits compound until they became wealthy. Had we kept marginal income rates at those high levels we would still be limping along and much poorer as a country. Unfortunately projections of tax levels under the street-organizer are predicted to rise to pre-Reagan levels - approaching 60%.

Now that the rich are wealthy what about those left behind? How can they get on our capitalist band wagon? What will make the poor and middle-class rich other than redistributing money from the wealthy? The answer is simple. Get them a pool of capital to invest in the stock market that over their working life will compound and make them wealthy too.

A pool of capital is almost too easy to find in America. For starters try privatizing the 15.3% in payroll taxes confiscated by big government from every worker’s paycheck throughout his working life. It is his money and the government is his government. Invested in the stock market for 40 years earning the historical rate of return will make the taxpayer a millionaire capable of funding an affluent retirement and the best medical care on the planet. As this plan would be involuntary just like Social Security and Medicare is today, it would present no hardship.

Today the people are screaming for big government to do something to stop the economic bleeding. Privatizing these entitlements would be a first step in restoring the “crippling of big government” our Founders had in mind. The enactment of private accounts would cut the government’s budget in half by removing entitlement funding. See below to learn how this revolutionary plan would still pay off all obligations under the discontinued plans.

Many of those elite Americans - wealthy and indoctrinated in liberal philosophy - are opting to back the socialists in the Democrat party in 2008 with full knowledge that their own wealth will be untouched by liberal legislation. As hypocritical as it is, this is the America way – selfish and individualistic. Oh they talk about solving poverty but see to it that their government never has that kind of money.

Those elites, the Democrat party and the real socialists along with the Republican party have absolutely no interest or legislative plan to improve the financial strength of the poor and middle-class. Promises to give them a $1,000 tax break and lower income tax rates and preferential education will not make the poor wealthy. In fact when you look up who is trying to make the poor rich on Google you only find several religious articles excusing the church from that responsibility. Oh they will hand out food and provide temporary shelter but attempt to make them rich – forget it. The standard excuse is let them get educated, work hard and get lucky.

There is no single impediment in the way of making the poor rich than the refusal of the political class to give the poor and middle-class back 15.3% of their lifetime income to invest in their own economy for the 40 to 50 years of their working life. As Americans save so little today (it often slips into negative figures) what better way to make America wealthier than to make all its citizens millionaires.

The Democrats derisively called the first phase of the supply-side revolution the “trickle-down” theory. If we made a class of rich people that invested in the economy it would trickle down to the poor. It did just that. However, by comparison to the wealth showered on the “rich” by “trickle-down” a great gap in comparative income and wealth has evolved.

Ordinary Americans are besides themselves because that disparity along with punishing inflation has led them to look for an answer and the only person listening is the street organizer. He understands the plight of the poor and middle-class as he has been schooled in collectivist dogma of the communist, socialist and Democratic socialism movements. Of course he is smarter than to be one of them, he is no doubt a capitalist using populism to get the power needed to employ the only arrow he has in his quiver – taxing the rich. That policy guarantees the continued poverty that underlies the support of his party and his run for office.

So here we are at the cross roads. Unfortunately the American people have been offered only one road – continued economic stagnation. Electing the street organizer will only make it worse but electing his adversary and their party only guarantees a continuation of the inability of ordinary Americans to achieve the American Dream.

The only recourse ordinary Americans have is the power they exhibited in 1776 to fight the totalitarians and recently to preserve their sovereignty by opposing amnesty. It is going to take a grass roots movement on the part of the American people. People on Main Street will benefit by becoming wealthy and people on Wall Street will benefit by making the capital markets explode with a massive source of new capital. The only people scarred by this revolution will be the politicians whose entitlement industry will be dismantled and their ability to dictate how Americans have to suffer an era of limits or other political cruelties will be extinguished.

Americans are not on the cross roads, they are not facing a new chapter in American history in 2008 they are on the precipice of a hill ready to be plunged into socialist punishment in the canyon below. It is not terminal. America is too big and too savvy to let socialism creep too far into their society. Presently the underclass in America don’t have an alternative to their dilemma – they are going to have to start their own American Revolution Part II.

We at the Ownership Society Institute have a website and book promoting this second phase of the supply-side economic revolution – we call it the Rise Up America plan and it can be found at www.riseupamerica.us. There are tables on the site that illustrate how even a minimum wage earner will end up a millionaire at retirement. There are tables illustrating the explosive growth the economy would realize if it adopts Rise Up.

The standard objection to what most people know will make them wealthy – privatizing entitlements – is that we can’t afford the transition. They ask where are we going to get the money to pay off all the present retirees and those retiring in the near future who don’t have time to accumulate a significant nest egg. The Plan answers that question illustrating how not only to fund private investment accounts and pay off all old program liabilities but in the process increase the value of the US dollar. See here and here and here.

You might want to check out Rise Up America as it promises to:

Make the poor rich
Make America wealthier
Extinguish $45 trillion in unfunded debt
Reduce the Budget by $1.3 trillion
Deliver the largest tax cut in history
Make 100% of Americans capitalists
Increase the value of the US dollar
Make American products competitive
Reduce management-labor difficulties
Cut our national debt from $9 to $5 trillion
Economically emancipate women
Increase retirement benefits

And Much, much more!

Happy Independence Day

Ownership Society Institute
Dick McDonald, Managing Director