Even working families can’t make it; time for a dividend?
Money’s scarce. Blame banks? Or share surplus?
| In 2007, the "income-inequality gap widens," notes Greg Ip of the Wall St. Journal (Oct 12). "Working families need help to afford the basics," wrote Ruth Mantell of MarketWatch (Oct 10). Two writers blame bankers’ control of credit: "C.H. Douglas: Pioneer of Monetary Reform" by Richard C. Cook in Global Research (Sept 24) and "A Short History of Lending and Borrowing" by Kenneth Couesbouc in CounterPunch (Sept 21). Another writer at Booker Rising, a news site for black moderates and black conservatives, nailed it in "Baby Bonds Vs. Citizens Dividend" (posted Oct 4). |
by Jeffery J. Smith
October, 2007
Ip: The wealthiest 1% of Americans earned 21.2% of all income in 2005. That surpasses the previous high of 20.8% set in 2000. The rich last had this high a share of total income in the 1920s, a prelude to the Great Depression. The bottom 50% earned 12.8% of all income, down from 13.4% in 2004 and a bit less than their 13% share in 2000.
Mantell: We no longer live in a world where having a job means you're automatically able to make ends meet. About 1 in 5 Americans -- 41 million people -- in working families can't afford basic needs such as health care and housing. Many of these workers earn too much to qualify for Medicaid and food stamps, while employer-provided health insurance doesn't cover enough of their basic medical cost. Government programs close out two-fifths of the "hardships gap" -- the difference between a family's income, including aid programs, and the local costs of goods and services. Public policy has not caught up to reality that even working families may need public support.
So what’s the right public support? Free credit?
Cook: Technology, in the hands of finance capitalism, backed by the power of the military imperial police state, increasingly lays waste to the resources of the earth while binding a majority of people to ever-increasing debt slavery, unemployment, and ill health due to stress. To undo the overbearing financiers, heed C.H. Douglas (1879-1952), a Scottish-born engineer who worked for a number of American and British companies.
In a speech in 1935 to the King of Norway, the British Minister, and the president and members of the Oslo Merchants Club, he said:
- * In 1694 the Bank of England was formed in Great Britain. World debt increased in the 17th c. by 47%; by the end of the 18th c. it had increased by 466%; and by the end of the 19th c. by 12,000%, even after creditors had to write off debts and start again.
* Some of the best brains, scientists and others, have been endeavoring to put the world out of work -- and they have succeeded. That is referred to as an unemployment problem, as if it were a catastrophe! We say this is a magnificent achievement.
* A National Dividend could be provided by the creation of new money -- by exactly the same methods as are now used by the banking system to create new money. This is not collection-by-taxation; the very rapid and drastic reduction of taxation is vitally important.
Couesbouc: Credit allows spending to increase beyond actual income. If the increased spending is an investment, and all goes well, it will increase income and reimburse the credit. While the profit made on the investment should cover the interest paid for the credit and leave something for the investing entrepreneur. If the increased spending is consumption, none of this happens. Consumption does not increase income. Consuming more today only means consuming less tomorrow, when the credit is paid back with interest.
Cranking up the printing presses to supply inky fresh notes to everyone could easily be inflationary. And to pay a dividend, we don’t need new money, if we use old money: "rent," all the trillions we spend on the nature we use.
Booker Rising: Freedom Democrats, a blog for libertarian Democrats, writes: "Hillary Clinton's plan to provide $5,000 baby bonds is being slammed by Rudy Giuliani, who compares it to George McGovern's citizen dividend of $1,000 to every American. Ironically, Giuliani seems to have voted for McGovern in 1972. More interesting is how poorly the baby bonds idea seems to poll. Could part of the unpopularity of the program come from its status as a 'tax-and-spend' add on to existing social programs, instead of a citizens dividend proposal that would replace existing social programs?"
Gradually, people are facing the fact that not all their income can come from their labor. Nor can a sufficient amount come from capital. A goodly portion must come from the value of land, of sites and resources (not to mention government-granted privileges). It’s a lesson the rich learned long ago.
Happily, the more we recover rent, the more we can forgo taxes on wages and earned profits. Likewise, we can lose wasteful and addictive subsidies the more we disburse social surplus as an equitable dividend. Once we replace welfare bureaucracy, then one won’t have to jump through hoops to qualify for their fair share.
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Jeffery J. Smith runs the Forum on Geonomics.
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Also see: Poverty Widespread in Pennsylvania, New Report Finds
Part III, The Trouble With Money and its Cure
Green Economic Policy |
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