To address the serious problems our nation faces and to achieve goals and objectives of this initiative, we propose the following solutions enacted through one or more Constitutional amendments and supporting federal, state, local, and corporate enactments and other measures:
- A one-time-only progressive and equitable net worth tax which will fund several one-time programs to create a level economic and political playing field for all in the United States.
- A shift nationwide to ensure all economic rents for natural resources and other monopoly resources – in other words, natural resource licensing fees – accrue only to public treasuries at the most decentralized level appropriate.
- Re-socialization of all natural resources in a decentralized and federalist manner suitable to the United States so that we bring the power to steward our natural resources back under the control of our representative legislative bodies and end the grant of private privileged power over natural resources, the accompanying titles granted, and the privileges enjoyed for monopoly rents of and inequitable benefits from these natural resources.
- Socialization of all our commons (whether natural or produced) at the appropriate governmental level: a) federal for interstate and international natural monopoly commons, b) states for state commons, c) local governmental units for local commons, and d) compact communities for community commons (so that a community owns its own roads, sidewalks, and other infrastructure) and private licensing of terrain. In general these natural monopoly economic sectors, natural monopoly industries, and other natural monopoly resources constitute districts, corridors or other resources for common shared use as well as all terrain available for private tenancy license, mortmain grants, rental use, extraction licensing, and other licensing for a fee.
- Reorganize all publicly chartered corporations and other government chartered enterprises into worker cooperatives and guarantee republican forms of governance (including direct-democratic participation) to the workers within all publicly chartered enterprises – except those which legislatures designate as public commons for public stewardship by governmental legislative bodies. Such reorganization deploys the same mechanisms of our original Constitution by dispersing power – even in the enterprise – across all workers, thus ending the consolidation of political power in the interlocking directorates of Wall Street promoted by the US Supreme Court and which has led to the very corruption of our judicial branch of government.
- Retain for legislative direction at the most decentralized level appropriate all natural monopoly industries and other monopoly resources vital to economic activity and prosperity.
- Provide new federal powers and reorganize federal, state, and local governments to strengthen accountability, transparency, public oversight, and non-market competition; and foster direct democracy at the most local community levels.
- A one-time-only, net-worth-tax paid debt forgiveness jubilee for all household debts at the time this amendment is proposed by Congress or within one year prior to ratification whichever is later; also repay all privately held federal debts immediately or as such treasury securities mature.
- Ensure through the reform and expansion of the Social Security Administration and Medicare, and working with state and local governments that the major savings objectives of retirement, medical coverage, and education are fully met in an affordable manner. using in-kind, volunteer contributions, community service, and also tax-subsidized approaches, we will resolve the crisis in Social Security and private pension system by expanding our way out of the crisis and not surrendering to the crisis.
- Address recent losses and future vulnerability in private retirement accounts and defined benefit retirement programs recently raided and targeted for raiding by rent-seeking interests and corporate raiders.
- Provide a thorough structural adjustment relief program for financial sector workers and other workers displaced by this initiative and provide training and employment opportunities to those who formerly lived off of financial ‘paper’ claims to others’ productive labor, or who served the rent-seeking sectors of our economy to shuffle wealth claims rather than producing useful products and services.
- A personal income tax holiday for one or two years to allow the IRS to focus on the one-time-only net worth tax.
These solution would provide a reset to our economy and our politics and overnight provide the conditions for a revolutionary transformation of our economy and a new unprecedented prosperity. The following discussion provides more details for these separate but interrelated initiatives.
A one-time-only progressive net worth tax
A proposed equitable and progressive net worth tax provides a source of property to facilitate the other programs. The goal is to tax away enormous concentrations of net worth which has been allowed to accumulate and concentrate in the hands of a few due to unethical and inappropriate compensation from dubious claims of natural resource ownership and equally dubious claims to the surplus labor performed by others in government chartered enterprises. The property assets which enabled such dubious claims to the labor performed by others will be targeted for complete elimination, but only after full market rate compensation for those assets. Debt instruments too are targeted by this plan but in the future, debt instruments and lending will be permitted. However, the pervasive reliance on equities and natural resource assets have led to a perverse distribution of income necessitating exponential growth in structural household and public debts. The plan does not seek to punish those for their accumulation of net worth but merely to tax this ill-gotten property to allow us all to regain and re-disperse the economic and political powers over our own labor and liberties that we all deserve. The proposal thus ends the power of Congress and the states to charter corporations which skirt the guarantee to a republican form of governance and also ends the right to make claims on labor of others because of any title to natural resources or due to equity claims on a productive corporate enterprise. The plan also vests in government the responsibility to avoid the accrual of economic rents to private hands but instead government must ensure such economic rents only accrue to a public treasury.
The tax also funds a one-time-only debt forgiveness jubilee for all households and governmental bodies in the US. This debt forgiveness jubilee does not end the practice of financial savings and loans, but instead merely reverses the irrational indebtedness that these inappropriate forms of property have forced upon the People of the US, where households and governmental bodies were forced into permanent indebtedness simply to ensure adequate aggregate economic demand for the gross domestic product of our nation.
A handful of US Corporations and US residents hold net worth in the tens of millions and even billions of dollars and will remit significantly higher portions of their net worth with this one-time tax. Again this is not due to punishment but it is necessary to address the inappropriate titles granted for ownership in natural resources and equity in government chartered corporate enterprise. However, for the vast majority of Americans, their primary residence and retirement, medical, and education savings accounts comprise the bulk of the assets in their net worth. A tax on this net worth would be modest (maybe 5 - 10%) and, on balance, nearly painless for most Americans (much less than is lost in the daily fluctuations of the financial markets).
For most Americans, this one-time tax on their net worth would involve a public reclaiming of the land value on which their primary residence sits. The homeowner will receive full compensation for the loss of this land value, but will have this compensation reduced by the amount of the one-time-only net worth tax. This reclaiming of the land value for the community would thus end the speculative investment in natural resources by instituting not merely ‘rent-control’, but a complete elimination of all land rents for all primary residences. As the local community reclaims title to the land under each home and the associated real estate value of that land, every homeowner still continues to enjoy the use of the land as a lifetime land grant. Homeowners are still free to buy a new home and sell their old home at their own discretion, but new nationwide rent controls requires that no one pays any economic rents on the land beneath their dwelling.
Foreign governments and corporations chartered by foreign governments would not be subjected to the net worth tax, even for US debt holdings. Foreign nationals would only participate in the net worth tax if they held permanent resident status in the US. The tax is therefore only imposed on US citizens and some non-citizen US residents, but the programs the net worth tax supports applies to all in the US so that all who own equities, who hold title to natural resources, or private entities who hold debts of US nationals and US governmental bodies will be fully compensated for these claims retired by the plan.
All economic rents for natural resources and some other monopoly resources accrue to public
This economic plan not only controls economic rents – as in the price paid for the use of natural resources – but ensures all such rents accrue only to public treasuries and also ensures rents for dwellings becomes a progressive rent where nothing is paid on a modest base amount for land for dwellings. Note that this does not refer to rent in the sense of a monthly lease payment for use of a building or for other products of labor, but rather economists’ use of the term ‘rent’, meaning the monopoly price paid for land and other natural or monopolized resources. For non-residential uses of natural resources, communities and local governments will be empowered to negotiate licensing terms with private interests to license the use of any land and other terrain. However, the rents for such non-residential uses of property will only accrue to the public treasury. A central role for government will then be to ensure any economic rents belong only to the public treasury. To not maintain such accrual of economic rents to the public treasury is to surrender completely to the corruption involved with privatizing these revenues. The actual control and use of the property remains largely unchanged since owners have a substantial stake in the improvements made to the land, but any rate of return accrues from the hard work and ingenuity of the licensee of that land and not due to a monopolized control over these natural resources.
This plan thus restores the powers of government, pervasive with prior feudal governments and before, which we failed to retain for our federalist republican form of government. It therefore ends the grant of titles to private interests that eventually re-established the concentrated privileged class of landlords of feudal times, but now without the socially inscribed tenet of noblesse oblige that created high expectations for how landlords must steward the land under their dominion and expend the revenues raised. By placing the stewardship of the land and other natural resources back into governmental hands, we ensure this governmental power is equitably and evenly dispersed through our republic’s many local representative legislative bodies. We still individually decide how to use the natural resources licensed to us and for specific projects, or a specific private enterprise, but the general principles that guide natural resource use and the proprietary act of setting the reservation price for such natural resources licensing will now reside in representative legislative bodies.
In order to develop residential properties, governments may allow competitive bidding from contractors to develop new housing on unimproved land or alternatively license development rights for a parcel of land so long as the developer sells the new homes for a rent-controlled price which allows the developer only the ability to recoup customary costs and a prevailing rate of return. The land-tenant-occupiers of homes may only resell their home for no more than the value added to it in construction materials, labor costs and added fixtures after depreciation and a reasonable rate of return. If the public wants a different use of the land for other purposes (other than residential), the government must use due process to compensate the homeowner for the depreciated value of the improvements on the land consistent with fifth amendment guarantees we already enjoy plus newly penned requirements for guaranteed rights when facing takings listed in a new political economy bill of rights. So overall, control and use of the land does not change immediately change from this plan, but the speculative gains from buying, selling and leasing land and other natural resources ends.
The proposal thus reins in the right of alienation of natural resources: a right not present in the traditional law inherited by the United States. Such a right was instead carved out by judicial, executive, and legislative decisions without due deliberation of the eventual re-establishment of a landed aristocracy such a right would entail. Somehow a right our founders thought unalienable was turned into a right some imagined could be secured only through the right of the alienation of natural resources.
Re-socialization of all natural resources
The accrual of other monopoly rents to the public treasury, constitutes a re-socialization of all natural resources. This is a re-socialization in the sense that governmental forms preceding our Constitutional republic had already socialized such natural resources and placed them under the stewardship of governmental agents. For example, the feudal lords all had – as governmental designates in a hierarchical arrangement – dominion over their manors, duchies, archduchies, grand duchies up to the entire kingdom for the king. When we as the People, replaced feudal governance with republican governance, we failed to retain the governmental power over these natural resources and place those monopoly resources under the stewardship of our representative legislatures. Though we held onto most other governmental powers and subjected those governmental powers to an equitable system of elected representation and democratic mechanisms, the governmental power over natural resources slipped through the cracks. This lapse has led to a re-establishment of immense concentrated powers over natural resources, but without any of the sense of noblesse oblige that accompanied those concentrated feudal powers. Whereas those nobles started with a strong duty to steward the manor as an obligation of their noble status, the new landlords – with their unprecedented concentration of natural resource ownership – feel no such noble obligation. These ignobles instead start from the sense that they should use the Earth’s natural resources to satisfy only their own narrow personal interests. If their own narrow interests ever – by coincidence – helps others, it is a mere unintended byproduct of the process. In the prior system of feudal government it was an integral obligation of all nobility.
So by applying the same spirit of the American Revolution and the US Constitution we can expand the equitable dispersal of governmental powers to the stewardship of natural resources as well. Like feudal government, our federalist system provides a similar hierarchical arrangement.
However, our federalist framers intended the hierarchical arrangement in our federalist republic to be largely the opposite of the feudal hierarchical arrangement. Whereas the feudal hierarchy started with the King – an absolute monarch, the federalist hierarchy starts with the People. Whereas the King granted privileges and allocated powers to subordinates, in the federalist system, the People granted polis powers to the federal, state, and local governments: all with tight legislative oversight. Whereas feudal hierarchy is a top-down hierarchy in terms of power where an absolute monarch doles out power to subordinates, in the federalist hierarchy power emits from the People and handed upwards to the nation. In feudal hierarchy service starts with the serfs and works its way up the hierarchy in a system of tribute until it reaches the King. On the other hand in federal hierarchy the federal nation was established to service the states, the People and the states were established to service the local governments and the People, and the local governments were established to service the People alone. In federal hierarchy such conceptions of top and bottom become purely spatial: the states are subordinate to the nation only in the sense that they are contained entirely within the nation. The citizens and other subjects to the polis powers of the nation, the states and the local governments are subordinate only to these polis powers and subordinate spatially in the sense that a person can only occupy and steward spatial terrain within a particular locale, within a particular state, and within the nation.
We grant only those limited powers to the federal government necessary to establish the goals listed in the preamble of the US Constitution and we grant to our state, county and municipal governments those powers necessary to establish and maintain those respective levels of governance. All other powers and rights we retain for ourselves and within other non-governmental institutional relations (family, community of worship and other communities).
We should think of our natural resources and the powers over those natural resources in the same way. We should grant to federal government the power to steward only those natural resources which represent irreplaceable and precious resource to the entire US electorate: our national treasures. We have in many ways already done so. The federal government has the power over stewardship of around one-quarter of all land in the United States. This is land rich in oil deposits, natural gas deposits, coal deposits, forests, pastures, lakes, scenic mountain wonders: essentially many treasures we think too precious to allow any single state, county, municipality, household, or individual to dispose of at their own unilateral whim. Instead we expect Congress to set general principles to guide the use of these resources and hire public servants to implement the will of the public in stewarding these resources. Congress can fail to meet our expectations, but turning over stewardship to a private corporation insulated from legislative representation does not solve the problems of failed Congressional accountability and corruption: it rather surrenders completely to that corruption and removes all public accountability.
Similar functions exist at the state level where state parks, state forests and other state administered lands represent powers to steward natural resources at the state level. Likewise for each of the other levels of government (for example, county and municipality): we grant powers to these levels of government to steward land and other natural resources on our behalf so that the stewardship of these resources is fully accountable to the public and the benefits accrue equitably with transparent administration and under the tight control of our representative legislative bodies.
We enjoy an abundance of natural resources, but these natural resources all represent finite resources which we cannot replace or reproduce. No amount of diligent human labor can produce the Rocky Mountains or the Great Lakes. We cannot use utility maximizing inducements to increase the size of the Sun and its precious energy which arrives for us to use each day. We cannot work harder and increase the total acreage of the Earth. Instead our work must go toward stewarding these resources and ensuring we and our posterity all share equitable access to these resources. Our constitutional and republican forms of government – instilled with strengthened democratic oversight and transparent administration – is our best tool to ensure proper stewardship and equitable access to these resources.
We should ensure that everyone by their very birth enjoys the same access to natural resources. We should all enjoy access to the land and other natural resources necessary to provide ourselves shelter. Some may have more non-natural resource wealth than others (such as vehicles, tools, equipment and other instruments of labor). Some may have more skills or more drive or work harder and achieve more, but such achievement should not be founded on one’s inequitable access to the abundant resources of the Earth nor due to an unwarranted privilege to deny others access to natural resources or to appropriate the work of others (as in the case of the appropriation of enterprise profit by those other than the workers in the enterprise). Regardless, disparities in ability will lead to disparities in wealth and income. However such disparities in wealth and income can never grow to the wildly perverse extent as they can when we grant inequitable and unwarranted privileges to privately control our treasury of natural resources. In that case, we end up with what we have in the United States today: enormous wealth formed at one pole and the frivolous and callous power wielded by those with such concentrated wealth and at the other pole those whose despair and dis-posession leaves them incapable of living the life every one of us deserves to live.
Therefore by restoring the governmental power to steward our natural resources – a power which feudal governors enjoyed – we grant to our republican and democratic forms of governance a power we lost in the transition from feudal forms of government to republican and democratic forms of government. Taking advantage of our federalist spatial arrangement we should ensure that the stewardship of precious national resources (and international resources through treaty) resides with the US Congress. Those resources requiring state, metropolitan area, county, municipal, and community stewardship should reside in a democratically elected representative body on each of those levels of government. Those resources necessary to a healthy residential community should be stewarded by community governance through newly re-invograted direct democracy. Finally within each community we should all enjoy a residential grant of land necessary to provide shelter to our families, our households, and ourselves according to our financial capabilities to develop and maintain that land.
This economic plan accomplishes these goals by using eminent domain and full market rate compensation to end the private ownership of natural resources and place all of these natural resources under the stewardship of our democratically elected legislative bodies. In the case of our residential property, little changes in terms of the use and control of these assets. We continue to enjoy the use of our dwellings, be they single-family homes, rental apartments, condominiums or what have you. However, our government essentially buys out our interest in the land beneath our homes. This buyout, along with the elimination or reduction of the accompanying monopoly rents paid for such land, reduces the undue private speculator tax we pay for living in compact cities and towns. The maintenance, depreciation, and administrative costs we pay for our apartment complexes and for our single-family homes remain. But these expenses which comprise the monthly lease or expenses of upkeep no longer include some of the additional payment for monopoly prices paid for the land which land speculators and mortgage lenders siphon off the top at significant social cost. We remain the kings of our castles with all the same Constitutional protections against government intrusion, but no one can any longer enjoy the privilege of receiving income from their monopolized control of land and other natural resources needed for us to build our homes.
For non-residential land use, rents might continue, but as the stewardship is turned over to the public so too do the revenues accrue to the public for licensing the use of such natural resources. Just as feudal government obtained much of its revenues from land rents so too will our democratic government obtain much more of its revenues from non-residential land rents.
So this requires the clear separation of the value of improvements made to land and the land itself. This can easily be accomplished by tracking and inventorying the value added in improving the land and establishing clear depreciation schedules for such improvements in a public registry. Those uninterested in resale value can avoid all of these requirements and simply improve their home and enjoy the use of their home. However, those wanting to maximize the resale value of their home need merely register the improvements as they occur though government-provided streamlined and computerized commercial systems. Every property owner will be entitled to sell for a price as high as that which recoups the depreciated value of all improvements made plus the purchase price paid for the improvements made by the previous owner all times the prevailing rate of return permitted for the community.
Socialization of our common infrastructure
In addition to our natural resources which inherently constitute monopoly resources, another form of monopoly resource exists: one produced by human intervention. Certain products of human intervention are peculiar in that the costs of producing them fall on average, and on the margin, the more we produce or the more intensely we use these produced resources.
These natural monopoly industries largely fall into two categories. The first are transport systems broadly conceived whether these systems transport passengers, freight, fuel, fresh water, wastewater, storm water runoff, refuse, electrical power, modulated frequencies, or data packets. These transport systems constitute natural monopoly industries because it is much more extremely efficient to create one transport pathway than it is to expend duplicate resources creating two or more such transport pathways. When multiple operators create duplicate pathways, the natural tendency is for those operators to merge or otherwise collude to share the spoils of their powerful monopoly privilege. A favorable trait of these transport monopoly industries is that, except in the case of peak contention on a pathway, the marginal cost of using the infrastructure is nearly zero. Imagine a roadway in the middle of the night. When a car drives down that roadway it contributes almost nothing to the wear and tear of that roadway and does not cost anyone else the use of that nearly empty roadway. The average passenger-miles is thus increased but the costs are not. Increasing off-peak use of such transport pathways therefore generally increases revenues for the transport system but does not increase the costs. Offloading peak use to non-peak times can also reduce the costs of contention for a pathway as drivers sit in stop and go traffic wasting fuel and time and creating aggravation for all. So with all transport networks we must somehow manage capacity contention and peak demands upon each pathway to make the most of the infrastructure.
The second category of natural monopoly sector of the economy is in insurance risk pools and other insurance programs. Here the average costs of administration not only decline the greater in size of the insurance program, but in addition, the risk itself declines in terms of the variance or standard deviation of the expected catastrophic costs. This diminished risk leads multiple operators to likewise combine or collude to minimize and manage risk and increase their profits when privately operated. This collusion creates a substantial social cost without any public benefit whatsoever.
These natural monopoly industries, along with all of the natural resources whose powers of stewardship, are therefore delegated in this plan to legislative bodies at various levels and therefore become a public commons treasury stewarded, administered and shepherded by each level of government. The legislative body thus acts as the proprietor on behalf of the public for these resources: demanding a certain level of compensation for use, setting a reservation price for use, and delegating precisely how these resources must be used and respected. Since we have these necessarily centralized and necessarily monopolized sectors of our economy, the only way to ensure power over these is dispersed and decentralized is to demand all stewardship of these resources resides in democratically elected representative legislatures (at the most decentralized level suitable to the task).
|Electronic transactions facilitators||Visa, MasterCard, ACH, Fedwire, Paypal, Paytrust||Consolidated and brought into the federally operated US Department of Market Clearing and its Bureau of Electronic Transactions. Those operations not involved with any commons, if any, persist as separate worker cooperatives, with structural adjustment assistance available to the workers. International operations can be dealt with in a number of ways including contributing the infrastructure to the UN, or the US operating the system for the World, or spinning off the non-US operations to separate worker cooperative corporations.|
|Railroads||Union Pacific Railroad, BNSF, Norfolk Southern Railway||Each railroad is separated into a freight and passenger hauler, and a railway. The freight and passenger haulers persist as independent worker cooperative corporations and the regional railways are consolidated into a single federally operated interstate railway system.|
|Telephone/CableTV/Internet Network Providers||AT&T, Comcast, Verizon, Sprint, Time Warner||Each provider is separated into a content creator or host service provider (if any) on one hand, and a network provider on the other hand. The content creators / host service providers persist as independent worker cooperative corporations while the network providers are consolidated on the local level and turned over to county or municipal governments as determined by state and local legislative bodies, and any inter-metropolitan, interstate, and international network provisions are consolidated into a single federally operated interstate and international network system (such as the wireless network providers along the interstate highway system).|
|Electricity Distributors||Consolidated Edison Company of New York, Exelon Corporation, California Edison||These corporations are each divided into separate components. The generating stations of each enterprise remain as a worker cooperative. The retailing and distribution components are turned over to local governments for direction by those governments’ legislative bodies. The long-distance transmission components are all consolidated together and become a part of a federally operated interstate electrical transmission system.|
|Wireless Broadcasters, Cable Broadcasters, and Satellite TV Broadcasters||Comcast, RCN, DirecTV, Time Warner, CBS, NBC, ABC, Fox, Clear Channel Communications, Newport Television||Each corporation is separated in two. The commons operator, such as broadcasting and content scheduling, is separated out and handed over to local government in the relevant broadcast community. Any long-distance networks become a part of federally operated interstate networks. The remaining business operations persist as a worker cooperative.|
|Providers of Customary Insurance||Allstate, American Family Insurance, American International Group, GEICO, Liberty Mutual, The Travelers Insurance|
|Fuel Pipeline Operators||Haliburton,|
|Natural Gas Distributors||NiCor,|
|Major banks||Wells Fargo, JP Morgan Chase, Citigroup, Bank of America||The core intellectual products and their staff and contract developers are brought under the direction of the US Department of Market Clearing to become the seed, along with the Federal Reserve’s ACH and FedWire systems, for a new federally operated Electronic Transaction and Asset Portfolio Tracking System. The system will include both core server-side systems under federal operation and open source client-side systems which these major banks and all other banks may customize and use to interface with this new federally operated electronic transaction system. Upon nationalizing some of the intellectual property assets of these major banks, the remaining banking operations will be again privatized, but now under the direction of their workers rather than an alien board of directors.|
|Nuclear Power Plants||The dangers inherent in nuclear power are far too great to entrust to private enterprise. The unwillingness of private sector oligopoly insurance corporations to even insure these power plants shows how unwise it is to leave these dangers power plants in private hands. These plants would be placed under the operation of the Nuclear Regulatory Commission or a new federal department reporting to the President and adhering to requirements established by Congress.|
|Major League Sports Teams||NFL, NHL, NL, AL, NBA and other major league professional teams||
The issues with major league sports franchises are complex, but they are, by deliberate design, monopoly enterprises. The home team venue should be public as a natural monopoly, though should not necessarily receive taxpayer subsidies, but instead rely more on user fees for support. Some form of public stewardship is desirable which balances the interests of the workers, the fans, and the broader public within the jurisdiction. The leagues themselves should also be nationalized and thus come under the direction of Congress (or through treaty, also jointly with Canadian parliament), especially regarding the determination of local franchise teams (typically monopoly or duopoly franchises).
|Shopping malls and other contiguous public commerce structures||Minneapolis/Bloomington’s Mall of America, Santa Monica 3rd Street Promenade,||The property will generally be turned over to metropolitan, county, or municipal government most suitable for stewarding this public accommodation commerce. The property management arm itself (if combined with the ownership interest of the public accommodation commercial site) will be turned over to its workers and become a worker cooperative corporation with an initial contract to continue management of the property on behalf of the local government.|
|Any corporation improperly holding rights to public commons||Goldman Sachs’ holdings in Chicago’s parking meters||These corporation continue in operation, but the contracts or common properties are eliminated from their portfolios and returned to the federal, state, and local jurisdictions which were not acting ethically when alienating these resources.|
|Pharmaceutical, Operating Systems, Media formats and codecs, Digital Rights Management systems, Genetic Engineering, and other intellectual property that is vital to our economic activity and whose continued monopoly proprietorship needlessly undermines our economic prosperity.||Various corporate and private intellectual property owners||Only certain key intellectual property falls in this category. As part of the one-time only net worth tax, when identified by Congress that it is appropriate to unleashing these intellectual products, these will be placed into the public domain or freely licensed to stimulate economic prosperity. On an ongoing basis we propose establishing a federal Intellectual Product Repository to host and encourage the free license and public dominion over certain intellectual products created through public funding, from individual voluntary contributions, from judicial remedies/awards from uncompetitive business practices lawsuits, and from active intellectual product coordination and development from a new Bureau of Intellectual Production. However, past practices have inappropriately handed over government sponsored intellectual products to private interests jeopardizing not only our economic health, but our medical health as well.|
|Many defense contractors, sole artificial monopolists, and other artificial monopoly enterprises who sell primarily to government||The Boeing Company, Lockheed Martin, Northrop Grumman,||These corporations either sell primarily to the US government with little opportunity for genuinely competitive bids or they represent the only monopoly producer of their products in the United States. Their market dominance thus undermines free and competitive markets and we gain no organizational benefits from maintaining these corporations as private and independent corporations. Workers will maintain or gain representation through collective bargaining rights but not through the directorship of the corporation as a workers’ cooperative. In the case of arms manufacturers, legislation might be enacted requiring consumer availability of products in keeping with the second amendment.|
For all natural monopoly industries and certain other monopolies, the plan does not turn over the direction of the enterprise to its workers, but instead vests direction of the enterprise in government legislatures.
Reorganization of all publicly chartered enterprises into worker cooperative corporations
Governments charter enterprises but most often does so in a manner which denies to the workers of those corporations a republican form of governance. It therefore allows those who do not produce – the board of directors – to take possession of and appropriate what has been produced by those workers. In the case of publicly chartered corporations, the government also allows these boards of directors to assign claims to the surplus product and surplus value produced by the corporations workers. In some cases these shareholders receive a dividend which is a distribution of that surplus value. In other cases, shareholders receive no dividend and thus the speculative market gains from buying and selling these dividend-free stocks really amounts to a gambling frenzy as ‘investors’ (really gamblers) bet over arbitrarily analyst-determined criteria of winners and losers. That government participates in and endorses this casino culture is a corruption of our republic.
So just as this plan ends the inappropriate and unethical ownership in natural resources, so too will the plan end the inappropriate, unethical, and socially destructive ownership of equities in government chartered enterprise. Again the plan does so by compensating these owners for the full market value of their former property.
This does not mean that workers will be their own independent bosses. Corporate workers will still be a part of a collective corporation. However, they will not only collectively produce together, as they already do, but will also collectively participate in the governance of the enterprise. The hierarchical administration of the corporation remains. Even the officers of the corporation remain. However, the boards of directors are replaced by vesting full legislative power in the workers themselves.
The issuance of equity shares is likewise eliminated as a mechanism of finance. Instead corporations will originate bonds or other debt instruments to finance new projects, expansions, or to smooth over lulls in sales.
One-time-only debt forgiveness jubilee
Much of the debt that accrues in the United States does so because of the inappropriate granting of titles to natural resources and the government’s tacit endorsement of exploitation in government chartered corporations. These privileged claims on the work performed by others leads to increasingly disparate distributions of income and wealth. As wealth distribution increases so too do the mechanisms which cause further concentration of wealth. Some find themselves in a position receiving unearned income that they can never possibly spend while others receive lower and lower incomes with which they cannot possibly buy what they have produced.
Much of the household and government debt in the United States exists as a mechanism to offset these disparate distributions of wealth and income. If such a wildly perverse distribution of income did not exist, neither would the accumulated household and government debt exist.
Since this economic plan solves the problem of those who receive income from their claims to natural resources or their claims to equity in government chartered enterprises and the work preformed by workers in those government chartered corporations, the plan eliminates most of the conditions which created such disparate distributions of wealth in the United States. By also resetting the debt distribution we allow all economic actors to start off on an equal footing.
Some may raise a concern that this amendment to the Constitution will set a precedent for repeated ‘one-time’ net worth taxation and debt forgiveness. Overall this concern is unwarranted. The elimination of equity ownership of corporations, the elimination of natural resources ownership to avoid the accompanying accrual of economic rents for those natural resources into private hands, and the one-time debt forgiveness will place political power, wealth, and income on an even footing. Most of the illegitimate mechanisms to receive incomes from the fruits of others’ labor will have been eliminated. Moreover, the republican stewardship of all our commons will place every person and every business on an equal footing where privileges to control the commons no longer exist and the economic rents from natural resource and other monopoly resources will no longer get diverted for private personal gain.
The only mechanisms remaining for living off the labor performed by others after this profound transition will be explicit retirement and disability programs, lending at interest, and royalties from the intellectual products and any other exceptional and innate talents of workers. While these mechanisms might facilitate a new destructive distribution of political power, wealth, and income, such a trend will be greatly impeded. In any event, if despite these measures, a chronic debt and disparity of income arises again, then another economic reset and thus a new constitutional amendment might be indeed warranted.
However, amending the Constitution is not a trivial thing to do nor is it an easy thing to do either. So any arguments about repetitions of net worth taxation and debt forgiveness is not a persuasive detraction form this proposal.
Expansion and extension of republican governance including direct democracy in decentralized sites
Presumption should be that anyone who resides in a community should have immediate participation in that community’s governance and anyone who works for a corporation should have immediate participation in the governance of that enterprise.
However, we need to solidify such public participation and make it once again an integral part of civic life and to disperse these new powers to the extent suitable to democratic governance. Also by specifying new federal powers targeted at servicing local communities and citizens in the active and meaningful participation in their sites: both workplace and living-place.
Since local communities will have new powers to steward their own terrain, we will encourage the creation of direct democratic peido-polis with populations of less than 750 persons or a few hundred households. These peido-polis will typically cover terrain of just a fraction of a square mile. The peido-polis will have full power over the licensing of terrain within the peido-polis subject to the guarantees enumerated in the Political Economy Bill of Rights. In addition to acting as the proprietor for retail and other commercial lands and buildings within its boundaries, the pedio-polis will also be responsible for overseeing the provision of infrastructures and services.
Federal government and all other jurisdictions encompassing a peido-polis should be reoriented and re-conceptionalized as governmental units which service the peido-polis by providing the infrastructure interconnecting these various jurisdictions of these governmental units and by efficiently providing services which benefit from economies of scale to the peido-polis.
Peido-polis focuses on developing, operating, and maintaining community centers, primary schools, community infrastructure, retail and other commercial centers, and emergency services officers.
Each peidopolitan focuses on its on development and self-sufficiency while relying on politan, metropolitan, state, and federal governments to provide services including income tax collection services. However, other encompassing units of government might also provide developmental aid to particular disadvantaged peidopolitan governments according to a legislatively specified criteria.
Federal government should therefore explicitly pursue new powers to fulfill its obligation to guarantee a republican form of governance at all levels of government:
- power to make appropriations for uniform revenue sharing with local communities according to their population, their area or other criteria as Congress sees fit;
- power to collect other income taxes on behalf of state governments and local communities;
- power to require state and local governments and their charters to provide complete and timely reports of their revenues, pecuniary expenditures and other resource expenditures, contract bids, licenses, grant awards, worker hiring and termination, and measures of various provisioned public services (for example, how much road surface area maintained at what quality, various emergency response times, and so forth): all in a uniform manner for comparison across governing units; like the census this information will remain undisclosed by federal government except in aggregates of an appropriate size
- power to provide services to support simultaneous human and machine readable uniform codes and statutes to guide and properly evaluate legislative, judicial, and executive actions
- power to provide and impose election services which are uniform, verifiable, open, transparent, and fair to all state and local governing units and their charters (such as their worker cooperative and member chartered corporations)
These measures will provide citizens and subjects with the information and analysis necessary to keep federal, state, community governments, and their charters duly accountable and transparent. Such information will allow analyses to properly compare and evaluate the effectiveness and efficiency of governmental units at all levels.
These initiatives also establish a climate of competitiveness among governmental units, but without reducing governmental performance to a single one-dimensional metric. Some polis may seek the lowest cost in the provision of governmental services. Another polis may seek to minimize costs except where costs are instead measured in the expenditure of labor rather than in the money costs of that labor to accommodate a living-wage policy for public sector workers.
Securing our major savings objectives: pensions, education, etc.
Because the amendments to our Constitution end all ownership of equities in government chartered entities within the United States and also ends the ownership of all natural resources, the public will be in need of new mechanisms for savings, storing and preserving the value of their savings, and growing their savings for retirement and other key savings objectives. Those in the US will still have many options for private investment, but such opportunities will not include equities in entities chartered by government within the US and will not include investments in natural resource portion of realty. Since rent control will separate the land and other terrain from the labor produced improvements to that land, such improvements to the land (traditionally also a party of realty) will continue as an instrument for personal and business savings.
However, new outlets will be needed for these major savings objectives such as retirement, higher education, private education and other fee-based education; rainy-day savings, and major durable purchases. Such savings objectives will find many financial instruments still available. The US Treasury market will continue though perhaps smaller than before. The bond market will continue, commercial paper, and many other financial will persist.
This initiative also proses the establishment of a new National Credit Union to replace the federal deposit insurance corporation that now extends poorly conceived insurance to private banks – thus creating severe adverse incentive where private banks are encouraged to take reckless risks with their depositors funds because those deposits are largely fully insured. We can eliminate this adverse incentive and still provide savings deposit insurance by moving those operations into this new National Credit Union. Now those responsible for insuring the funds within the federal government are the same as those responsible for stewarding and managing those funds. Therefore we no longer extend insurance to privileged private interests who profit motive places them as adversaries to the health of the insurance program.
This National Credit Union will provide a new outlet for savings: a selection of public saving instrument options – many, if not all, fully insured. The National Credit Union will then act as an intermediary to make these funds available to borrowers whenever project evaluation is not an integral component of the creditworthiness evaluation. This includes all sorts of lending based largely on credit incident history of the borrower or for home and other building mortgages, a routine appraisal of the building’s value. Other types of lending require local knowledge and expert project evaluation and these thus remain the realm for private banks and private investors. But for these other routine lending operations, the evaluation is largely mechanistic and a mechanism best determined through legislative deliberation.
Finally, this initiative proposes a major expansion to Social Security through a simple guaranteed program to buy shares in our nation’s gross domestic product. Make periodic contributions in your spring years and you will receive a credit for that portion of GDP forgone: a share of GDP which you will receive in your autumn years in turn. This creates a self-sustaining system of voluntary Social Security contributions backed by the taxing power of our federal government. Retirees no longer face the fear of a market crash during their retirement or in the critical years leading up to retirement when retirement account growth is pivotal.
In addition to the new voluntary contributions to Social Security, this initiative includes many other enhancements to our total retirement system. First of all, the elimination of equities on government chartered enterprise is itself an enhancement. Many corporate equities have degraded into mere gambling chips. As the savings of the baby boomer generation dramatically increased due merely to their own retirement savings planning, these gambling chips created the false impression that stock values rise due to magic alone. Yet the rising stock values and the profit-taking afforded by those rising stock values was due largely to the funds poured into the stock market by these baby boomers – either directly through their own retirement account management or indirectly through the many investment funds who likewise invest in corporate equities. The funds are not there for the future retirement of these retirees. The funds are gone. Unlike the social security trust fund, no one guarantees the funds you place into the stock market. What is gone is simply gone.
So reforming, reinforcing, and expanding Social Security is vital in a financial environment where the baby boomers cannot depend on their stock portfolios. However, even before we allow those portfolios to collapse, this plan proposes to convert those values into National Credit Union savings instruments and into Social Security Trust Fund voluntary contribution GDP shares. This expansion of Social Security through the initiation of a voluntary contribution program helps address our Social Security shortfall for baby boomer retirees. To the extent we can encourage voluntary contributions to Social Security we relieve pressure on the mandatory contributions and this allows us to lower the rate for FICA. By also lifting the salary cap on FICA expanding FICA to a tax on all incomes not just payroll, we can thus greatly reduce the FICA rate. Assessing FICA on other incomes will spread the burdens of the mandatory portion of Social Security to more receivers of income.
In reducing the rate for FICA we can also use that as an opportunity to finally implement a universal medicare-for-all single-payer national health insurance program. In this way, the rate for FICA might not decline as much or might not decline at all, but more of the mandatory contributions will be diverted to this medicare-for-all insurance program. By finally establishing medicare-for-all we also eliminate another major savings objective: that of financially preparing for any catastrophic health incidents.
The following measures:
- An expansion of Social Security’s Old-age, Survivors, and Disability Insurance Program to include a mandatory contribution from all incomes: not merely wages and salaries.
- A reduction in the mandatory rate of FICA contributions and comparable rates for other incomes too but with some of that reduction instead retained and diverted into a national medicare-for-all single-payer healthcare insurance program.
- a new voluntary contribution program to supplement the mandatory contribution to facilitate more ample retirement where contributions buy time-deferred shares in our nation’s gross domestic product.
- An expansion of medicare to provide universal health care insurance coverage to all Americans regardless of age and through a partial reallocation of the reduced FICA contributions.
- The conversion of all defined benefit pension plans into special issue shares in the Social Security voluntary Trust Fund stewarded by the Social Security Administration instead of private for-profit financial interests.
- The restoration of defined benefit pension plans recently lost through employer manipulation and financial crisis by providing those who lost their pensions with special issue shares in the Social Security voluntary Trust Fund.
- The replacement of any assets not taxed, but targeted for elimination through the one-time net worth tax, with voluntary contribution credits to Social Security or savings instruments and other financial instruments issued from a newly established National Credit Union.
By bringing in assets from existing defined benefit pension programs, the plan provides a larger risk pool to ensure we as a society meet our obligations to these future retirees. Equities in US chartered corporations and asset ownership of natural resources will no longer be an option for pension savings, but all pension programs will receive suitable liquid assets to replace those investments. However, by expanding social security we can ensure we meet our commitments to provide for those in old-age, their surviving spouses and the disabled: and in a manner which does not leave retirees subject purely to the whim of speculative financial markets.
By following this path, we ensure through through the expansion of the Social Security Administration and Medicare, and working with state and local governments that all customary and major savings objectives – retirement, medical coverage, and education – are fully met in an affordable manner, using in-kind, volunteer, community service, and also tax-subsidized approaches when necessary. While we still will face undue burdens from the poor financial advice we have all received from Wall Street regarding the preparation needed for baby boomer retirement, we will be in a much better position than if we continue to take their bad advice.
Further addressing the housing crisis
While this initiative inherently resolves many of the causes and consequences of the recent housing crisis in several ways, the program also proposes relief for all those homeowners who lost their home to foreclosure since the 2007 due to the housing bubble bursting. With the one-time net worth tax, we can restore to homeownership all those homeowners who lost their homes due to the Wall Street induced housing bubble and they too will be mortgage free like all other homeowners. While many will not be able to return to their previous home, this initiative can allow them to return to a comparable home and now no longer facing an underwater and overwhelmingly unserviceable mortgage. The housing bubble led to a substantially overbuilt housing market, so the issue of restoring home ownership for those injured by the housing mortgage crisis is not one of limited resources, but an issue of a severe misallocation of our resources.
Addressing the pension crisis
As with the housing crisis, many have seen their defined benefit pension plans raided by financial interests and other corporate raiders. This one-time only net worth tax allows us to reverse those assaults on working men and women and with the other constitutional changes enacted, perhaps prevent any such raids from ever occurring again.
Income tax holiday
Both cue to the tremendous quantity of work involved in the one-time net worth tax and its ability to quickly erase much of our national debt, a one or two year personal income tax holiday is also recommended. Such a tax holiday would add approximately $2 trillion to the national debt, but given that the program eliminates most of the national debt and places federal government back on a solid fiscal footing, the tax holiday will be easily borne.
Summing up the solutions
This economic plan permanently ends private ownership of equities for government chartered corporations and other chartered entities throughout the United States. This equity largely represents a residual claim on the work performed by others and is therefore enforces a form of involuntary servitude. Also the plan ends all private ownership in natural resources within the United States and its territories. It does so through compensating the current owners at the the market value for equities and natural resources – completely financed by the one-time-only progressive net worth tax. Therefore the plan does not penalize investors based on the composition of their portfolio but simply taxes all portfolios at the same progressive net worth tax formula and then fully compensates all owners for the particular property assets targeted by this initiative.
The plan also forgives all standing debts for households and privately held federal treasury debt, but does not permanently end debt instruments as mechanisms of finance and financial savings. Instead this debt forgiveness serves as a reset to address the persistent problem of debt in the United States and to end our complete reliance on debt to drive our economy. Once wealth has accumulated and concentrated in one pole, the problems of debt only snowball as those who cannot possibly spend all their enormous income from this misallocation of wealth, receive ever more income in the form of interest on these ballooning debt instruments. Without such a reset, we cannot establish a smooth running and prosperous economy, but will remain forever susceptible to completely unnecessary financial fragility. It is not necessarily the case that we can eliminate all financial fragility and all the damage of business cycles, but we certainly do not need to foster the levels of financial fragility and wild swings in the business cycle we now face.
Along with an amendment to the US Constitution, various supporting legislation will also be necessary at the federal level, in each of the states, and in many county and municipal governments as well. This supporting legislation will fill in the details of the stewardship of our natural resources and ensure that we strengthen the accountability, equitability, and transparency of such stewardship as well as the accountability of all government chartered entities to their constituencies.
Also every corporate enterprise will need to establish its own worker cooperative constitution; establish rules of decorum for legislative participation; establish new, alter or re-affirm existing work rules; establish equitable procedures for induction, termination, and compensation of all workers; establish clear agreements and procedures for existing and new intellectual products within the enterprise; and for any multi-site enterprise, establish a workers’ congress, make cooperative franchise arrangements or other multi-site cooperative arrangements, convene a panel to adjudicate worker grievances, and establish a cross-site business-lull risk fund.
The plan requires a tremendous mobilization of the public, current politicians willing to support the public, and many newborn politicians drawn from a genuine grassroots movement. The legislation will establish many new federal programs. However, the biggest changes will occur at the community level and in the each and every government chartered enterprise. Immediately after ratification, the day-to-day operations in every enterprise and in each municipality will still continue much as before. However, the seeds will be planted for revolutionary changes as the workers in every enterprise and the electorate in every community begin to unleash their new political powers: the powers to steward and act as proprietor over their immediate material conditions – both where they live and where they work.