Yes We Can
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On December 1, 2010, the President’s Debt Commission issued a report recommending specific budget cuts and tax increases. To date, these austerity measures have not been acted upon by the administration.
Written by Dick McDonald, founder of www.theusaplan.com
During the recent campaign, the Republicans promised draconian spending cuts to the national debt and tax cuts for the 2% of “job creators.” But these, it seems, were largely perceived as attacks on government welfare and entitlement programs; and the people re-elected President Obama and a majority Democrat Senate.
All that was heard from both parties was “no we can’t” – compromise our cradle-to-grave policy or sink-or-swim principles. What the nation desperately needs is some meaningful “Yes we can,” and they need it in big doses because we are heading off the proverbial social as well as fiscal cliff.
This is why I started the Prosperity Commission to give Americans the “hope and change” no government in the history of man has ever given its poor and working class – wealth. That is a big idea; one the people will actively support.
Granted, America has the “wealthiest “poor in the world, but that “enrichment” is supported by government entitlement and welfare programs that have run up debt amounting to a $1.2 million liability for each and every household in America. See www.usdebtclock.org.
The Prosperity Commission is promoting its USA Plan. The “USA” stands for the Universal Savings Account. At its core, the plan expands trickle-down economics to include (1) the poor, (2) the middle-class and (3) rich people who aren’t “job creators,” like movie stars and sport stars. We prefer to call it the Rise Up Theory of Economics.
Making all Americans job-creators will lead to a citizenry that can afford, out of their own pocket, to retire affluently and acquire the best healthcare on the planet. Considering our current unfunded $121 trillion of debt attributable to the existing Social Security, Disability and Medicare programs, the government is clearly not up to the task.
It is time for the people to assert their sovereign right to change the way government works as specified in our Declaration of Independence. The USA Plan is step in that direction.
The USA Plan funds each taxpayer’s Universal Saving Account (USA) by diverting his or her Federal payroll taxes (the 15.3% of their gross income withheld or paid) into their personally owned account, which is unreachable by the government or the courts and administered by an independent trust not associated with Wall Street.
Over the 40-year working life of the average $50,000-per year taxpayer, that 15.3% withheld or paid amounts to an investment of $300,000 (40 x 15% x $50,000). Invested weekly into the stock market (not bond or money market) will accumulate and compound into a nest egg of $ 4 million, based on the average rate of return for 40-year investments in the S&P 500 since 1911 – the period of 1871 to 1911 being the first 40-year period. See the USA Plan website for the year-by-year calculation of the $4 million nest egg and the historical record of the S&P 500’s rate of return.
The logical response to the diversion of payroll taxes into USAs is, “Where are we going to get the money to pay existing Social Security, Disability and Medicare benefits?” The answer to that is much simpler than you think: The USA Plan upon enactment will immediately cut the $138 trillion of “funded” and “unfunded” US debt to $30 trillion.
The existing $16 trillion of funded debt is counter-balanced by $5 trillion in bonds created by Congress to cover their confiscation of excess payroll taxes collected since the 80’s, which have been used to pay for unrelated government programs. As entitlement benefits cost about $1 trillion a year, we can cash those bonds and not increase the funded debt by one dime. This would cover the first five years of the USA Plan.
We believe the $19 trillion ($30-$11 trillion) should adequately fund those legacy entitlements until such time as each taxpayer has enough in his or her USA to fund their own retirement and medical expenses. The actuarial scientists will put a fine point on this number, but by then income tax receipts will be sufficient to cover any shortage by leaving these entitlements as the floor on benefits for those who never get a USA.
A massive increase in income tax receipts will follow the enormous increase in economic activity triggered by the USA Plan. Investing $1 trillion of new USA capital into the stock market each year will immediately result in the creation of millions of new private-sector jobs; the more capital there is the more jobs will be created; the more jobs the more income taxes. The Plan should result in growth rates in the low teens— something that has not been seen since we helped Japan out after WWII.
In fact, Japan’s miraculous jump from last to second place in Gross Domestic Product in just ten years is a case in point. The grandfather of the Prosperity Commission’s own Jeffers MacArthur Dodge went to Japan after the war to restructure their chaotic financial situation. Dodge reasoned that since the wealthy had insufficient funds to bankroll the country’s resurgence, going directly to the biggest source of new capital – the people—was the way to solve the problem.
He created the Japan Postal Bank, which allowed the people – all the people- to enjoy a tax break. They didn’t have to pay taxes on the interest they earned. The rest is history. The incentive motivated many Japanese to invest as much as 50% of their annual income into the Postal Bank, which indeed was used as capital to fund Japan’s miraculous economic expansion.
The USA Plan would be even more potent than Japan’s tax-free-interest incentive. The USA Plan enables people to use the billionaire’s tax shelter of not paying tax on the appreciation of their stock. In essence, the Plan makes the 98% into job-creators, replete with the billionaire’s tax shelter.
However, the USA Plan does not leave the job-creators (the “2%”) out of the equation: on the contrary they will have to bust their tails creating new business opportunities and working 18 to 20 hours a day to handle the growth.
A nest egg of $4 million delivers the American Dream of financial independence. But it also allows for those who don’t want to go to college and have other interests in life to make it also.
We don’t have room to cover all the benefits the USA Plan delivers. The website covers many of them, e.g., it economically emancipates married women, allowing those who wish to stay home and raise their children a 50% share of the $4 million dollar nest egg and a 50% share of that $33,000 a month retirement check.
By having one retirement account for all, we eliminate the need for governments and private corporations to fund them. Please visit the web site to review many of the other benefits.
Like most things in life we have to see it to believe it. That is what makes videos, graphics, and animation such effective communication tools. The Prosperity Commission is in its infancy. But it plans to fund educational videos to wake the people up to the advantages of the USA Plan, and the knowledge to appreciate its viability. We hope the public and our institutions will support us as we believe we have the best solution for combating endemic poverty and creating unlimited prosperity for ourselves and our posterity.
Folks, YES WE CAN.