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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