Public Ownership of Capital Assets -Gary Reber

Disclaimer: The Public Economist does not necessarily agree with the views expressed. It is second in the series of seven pieces which Gary has generously agreed to share with TPE.

The fact is money power rules. When money power is broadly distributed in the hands of the citizens, not the politicians or bankers, the people shall rule. Ensuring that money power is broadly distributed should be the primary role of the Federal Reserve. The Federal Reserve Board is already empowered under Section 13 of the Federal Reserve Act to reform monetary policy to discourage non-productive uses of credit, to encourage accelerated rates of private sector growth, and to promote widespread individual access to productive credit as a fundamental right of citizenship. The Federal Reserve Board needs to re-activate its discount mechanism to encourage private sector growth linked to universal capital ownership opportunities for all Americans. The Federal Reserve, which has been largely responsible for the powerlessness of most American citizens, should set an example for all the central banks in the world. Members of the Federal Reserve need to wake-up and implement Section 13 paragraph 2, which directs the Federal Reserve to create credit for local banks to make loans to finance economic growth. We should not destroy the Federal Reserve or make it a political extension of the Treasury Department, but instead, reform it so that the American citizens in each of the 12 Federal Reserve Regions become the owners. The result will be that money power will flow from the bottom up, not from the top down, not for consumer credit, not for credit that doesn’t pay for itself or non-productive uses of credit, but for credit for productive uses to expand the economy’s rate of growth.
In summary, the Federal Reserve should begin creating an asset-backed currency that could enable every child, woman, and man to establish a Capital Homestead Account or “CHA” (a super-IRA or asset tax-shelter for citizens) at their local bank to purposely acquire a growing dividend-bearing stock portfolio to supplement their incomes from work and all other sources of income. The CHAs would process annually an equal allocation of productive credit to every citizen exclusively for purchasing full-dividend payout shares in qualified companies needing funds for growing the economy through viable self-liquidating capital formation projects and private sector jobs for local, national and global markets. The shares would be purchased using interest-free capital credit wholly backed by projected “future savings” (earnings) in the form of new productive capital assets as well as the future marketable goods, products and services produced by the added technology, renewable and “green” energy systems, manufactories, rentable space for entrepreneurial endeavor and infrastructure, both repaired and new, added to the economy. Risk of default on each stock acquisition loan would be covered by private sector capital credit risk insurance and reinsurance, but would not require citizens to reduce their funds for consumption (savings) to purchase shares, nor would there be any other requirement other than being a citizen.
As for all future development and infrastructure there should be a transition to 100 percent renewable energy and “green” building within the next 10 to 20 years. Renewable, clean energy and “green” building regulations should be incorporated into our building codes for homes, real estate developments, manufactories and infrastructure. At the same time, all existing buildings should be upgraded as much as possible. In order to create viable manufactory capability and reinvigorate “Make It In America” and “Made In America,” the government should eliminate tax incentives that reward American companies who outsource their supply chain parts and finished products manufacturing and off-shore their manufacturing, and instead create financial incentives and tax provisions to reward American corporations that bring manufacturing back to the United States from abroad, promote manufacturing investment, and incentivize more investment by foreign companies, all with the condition that the employees and non-employees will share in the ownership benefits generated by the new capital formation projects. The result will be more broadened ownership and insourcing of jobs created by the new capital formation projects, and make America self-reliant to the greatest possible.