Mar 27 2009
While Perseverance is Good, Brilliant Innovation is Better!
Barack Obama ascended to the Office of the President of the United States due to his incredible perseverance - and BRILLIANT INNOVATION. Having secured the highest office the focus has now shifted to creating a sustainable economic recovery. The number one question growing in intensity, volume and magnitude is - How are you going to fund all these wonderful agendas?
Look to the history of the election. Thinking “outside the box” Team Obama went to the least likely and most underrated source for funding, a populous movement based on small (by traditional political contribution standards almost miniscule) contributions by millions of donors. This brilliant innovation provided for an involvement and co-ownership of the process that set a new bar for campaigns. Now is the time to apply this same brilliant innovation to a new monetary policy that funds a sustainable economic recovery and beyond. This would also address the question, “Mr. President, what are you asking the American public to do”?
So, what is the National Fiscal Monetary Policy equivalent to a populous political campaign funding? The two key elements are: 1) Go to where the money is; and 2) Provide for widespread participation and involvement. During the election the money was available from every conceivable source, summarized and projected onto a national level, we can simply call it the national Net Worth. The issue is how to provide for Net Worth to be invested in funding a sustainable economic recovery and lay the foundation for a green economy. Americans across the nation are yearning for a call to action.
Even after the dramatic loss in the stock markets, there exists today roughly $70+ Trillion of Net Worth in America. This means that when the Obama Administration creates a way for just 1.5% of this amount to participate in funding the recovery the result would create a $1 Trillion ‘FundAmerica’ Super Fund without a single $1 of direct government funding! This $1 Trillion would create 5+ Million jobs and can be re-used and re-cycled to do so again. Not only is ‘the devil is in the details’, but, in addition, this new BRILLIANT INNOVATION has to be budget neutral and provide adequate incentives to get the public to fund it. Tough task? Not really.
Imagine a change in the tax code that gives FundAmerica ‘Super Fund’ investors the following advantages. The investment is in the form of buying either a CD (with the total principal amount of the CD insured by the full faith and credit US Government against bank failure), or investing in a Master Limited Partnership that aggregates funding and buys the same type of CD. The investor receives a 10% tax credit on the total CD deposit amount AND the interest income on the CD is tax free. The entire amount of the CD has to be pledged as collateral for a qualifying Pay Back scenario FundAmerica Loan with mandatory risk management provisions. The easiest example of this would be a construction project that purchases a completion bond on the construction and has permanent or take out financing in place in the form of either traditional long term financing or sale of a future revenue stream to a fixed income investor (from usage fees such as tolls on a road or tickets on a public transportation system). The long term financing pays back the construction loan and releases the CD collateral pledge - hopefully, to be renewed and used again - in the aggregate for another $1 Trillion.
The 10% tax credit would ‘cost’ the U.S. Government $100 Billion in revenues,, so to make this amount Budget Neutral, we would have to tighten or obviate current tax discounts that have no impact on creating jobs. This means ending capital gains, oil depletion, and accelerated depreciation treatments for anything that does not directly fund job creation. The end result is that the only true ‘tax haven’ will become the FundAmerica authorized programs and the money will flow into the programs.
For more detailed discussion, a list of qualifying programs, and the opportunity to forward the information to your President, Senators, and Congressional Representatives click onto the information only not for profit website: www.theprosperitymandate.org
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