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Gary Reber
NationofChange / Op-Ed
Published: Sunday 1 September 2013
The American Dream is fast disappearing as people experience fewer opportunities to earn an income.

The Income Solution to Slow Private Sector Job Growth

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There is no solace in the statistics. Researchers at the American Enterprise Institute and the Center for Economic and Policy Research shows that a worker between the ages of 50 and 61 unemployed for over a year has only a 9 percent chance of finding a job in the next three months and only a 6 percent chance if he or she is 62 years or older. According to the Economic Policy Institute, there are approximately 3.3 unemployed workers for every job seeker.

Because for the vast majority of Americans a JOB is their ONLY source of income, millions of families are one layoff or family emergency away from going into bankruptcy, and then what? Start over with nothing and extremely poor JOB prospects.

And though millions of Americans own diluted stock value through the “stock market exchanges,” purchased with their earnings as labor workers, their stock holdings are relatively miniscule, as are their dividend payments compared to the top 10 percent of wealthy capital owners, whose primary source of income is from stock ownership dividends, capital gains, interest and rent––not wages. 

The American Dream is fast disappearing as people experience fewer opportunities to earn an income, and as a consequence cannot act as "customers with money" necessary to support a vibrant economy. The result is a permanent national recession at the brink of a second Great Depression.

The conventional solutions are to pay higher wages and use tax extraction and national debt to finance make-work projects contracted out to narrowly-owned private sector companies who reap profitability as a result of their ownership, all in the name of JOB CREATION.

Paying higher wages drives up the cost of producing marketable products and services, which costs are passed on to the consumer.  Multiplying or creating jobs when technology can do the same thing cheaper also increases costs that are passed on to the consumer.  This is “cost-push inflation” — the rising cost of an input to production “pushes” prices up.

This is not to say that higher wages and unnecessary “job creation” also contribute to “demand-pull inflation.”  When the wages and job creation are subsidized, the money comes out of increased government debt — money creation.  Whether paid to consumers as welfare or to workers whose employment is effectively boondoggling, effective demand in the economy increases, which “pulls” prices higher in response, hence, “demand-pull inflation.

Unfortunately, our political leaders, academia, and the national media offer up ONLY the same old conventional won't-work suggestions for the government to take the lead and arrange the marriage of private and public capital to regenerate real growth without the realization and requirement that the ownership of FUTURE productive capital wealth must be broad. No longer will we achieve growth the old-fashioned way, by investing in projects that enrich our productive capacity in the name of JOB CREATION, which is expected to have a multiplier effect, when in actual reality such investment continues to further CONCENTRATE OWNERSHIP of America's future wealth-creating, income-generating productive capital assets among a tiny ownership class.

Of course, all this would be moot if 1) all people were capital owners and the price of labor could rise or sink to its “real” level, 2) all financing for new, non-speculative capital investment came out of future savings instead of past savings, and 3) government was prohibited from creating money (“emitting bills of credit”), living within its tax revenues, and borrowing out of existing savings to cover temporary shortfalls or meet emergencies.

That’s what “Capital Homesteading” would do.

Capital Homesteading is the ONLY viable solution to the economic decline of America. Its implementation requires that our leaders, academia and the national media recognize that all individuals to be adequately productive cannot do so when a tiny minority (capital owners) produce (via the productive assets they own) a major share and the vast majority (labor workers), a minor share of total output of the economy's products and services. The system must be reformed to create a world in which the most productive factor of the FUTURE — physical capital — now owned by a handful of people — is owned by a majority — and ultimately 100 percent — of the consumers, while respecting all the constitutional and private property rights of present capital owners.

A balanced Just Third Way approach to building a FUTURE economy that supports general affluence for EVERY American is presently not in the national discussion. It appears that the President of the United States, the elected Congressional representatives and Senators, academia, and the media are oblivious to this principled solution that has the ingredients to power economic growth at double-digit GDP rates.

This goal requires investment in FUTURE wealth-creating, income-generating productive capital assets while simultaneously broadening private, individual ownership of the resulting expansion of existing large corporations and future corporations. Not only is employee ownership the norm to be sought wherever there are workers but beyond employee ownership the norm should be to create an OWNERSHIP CULTURE whereby EVERY American can benefit financially by owning a diversified SUPER IRA-TYPE Capital Homestead Account (CHA) portfolio of income-producing, full-voting, full-dividend payout securities in America's expanding corporations and those newly created to produce the future products and services needed and wanted by society.

Those who read this and are in a position of influence should reach out to President Obama and the leadership of his Organizing for Action as well as to other political leaders, and call for them to convene a national discussion using the national media and social media, and our educational institutions, to open up a discussion on EVERY CITIZEN AN OWNER opportunity. We need fresh and inspired leaders who can educate on this issue at this time because academia, the media, and our so-called leaders are not addressing how people make money and the significance of OWNING wealth-creating, income-generating productive capital assets. We need to get people to understand that as with today, in the FUTURE we will continue to experience tectonic shifts in the technologies of production, which will destroy jobs and devalue the worth of labor. This is a crucial understanding because at present for the 99 percent of the nation a JOB is the ONLY source of income to support themselves and their families. We need political leaders who will commit to a government policy focus on OWNERSHIP CREATION, by which jobs will result and naturally follow as the economy revs up to double-digit GDP growth and fully applies technological innovation and invention to shift from unnecessary labor toil to human-intelligent machines, super-automation, robotics, and digital computerized operations.

To accomplish the goal of universal ownership, the Federal Reserve needs to stop monetizing unproductive debt, and begin creating an asset-backed currency that could enable every child, woman and man to establish a Capital Homestead Account or "CHA" at their local bank to acquire a growing dividend-bearing diversified stock portfolio to supplement their incomes from work and all other sources of income, and provide future financial security in retirement. Steadily over time this will create a robust economy with millions of "customers with money" to purchase the products and services that are needed and wanted.

We need to apply the proven principles of insurance to the financing of FUTURE wealth-creating, income-generating productive capital assets. We need to empower individuals to acquire multiple company diversification ownership facilitated with private capital credit insurance or a government reinsurance agency (ala the Federal Housing Administration concept). The promissory note can be offset to the government’s central Federal Reserve Bank in return for the cash equivalent of the amount of the loan, less an administrative fee. The only cost to the direct lending bank in making a loan to the corporation would be the administrative fee, or about 2 percent of the loan’s principal and then another 2 percent for capital credit insurance, with an additional quarter of a percent paid to the Federal Reserve Bank to monetize the loan and give the lender the same cash as it would have had if it had actually loaned money to the corporation. The lender’s cash loaned to the company's Employee Stock Ownership Plan (ESOP) trust and/or the individual Capital Homestead Account or "CHA" (a SUPER-IRA or asset tax-shelter for citizens) is replenished with the Federal Reserve Bank cash. When the company pays the ESOP trust or CHA enough money to enable the trust(s) to repay the lender, the lender has to retrieve the note and pay back the Federal Reserve Bank. Thus, the loan cost would be essentially not more than 5 percent to allow ownership broadening financial capital to be in­vested in ownership broadening ESOP and CHA trusts to create new capitalists. As such, national capital credit insurance replaces the requirement for pledging past savings and security (which for the most part most Americans do not have).

Our leaders need to put on the table for national discussion this SUPER-IRA idea and the necessary reform of our tax policies that would incentivize corporations to pay out fully their earnings in the form of dividend income and issue and sell new stock to grow, instead of financing with “retained earnings” and borrowing, which further concentrates ownership among the people who now are the corporate owners. The CHA would process an equal allocation of productive credit to every citizen exclusively for purchasing full-dividend payout shares in companies needing funds for growing the economy and private sector jobs for local, national and global markets,

The shares would be purchased on credit wholly backed by projected "future savings" (earnings) in the form of new productive capital assets with future marketable products and services produced by the newly added technology, renewable energy systems, plant, rentable space and infrastructure added to the economy.

As noted above, risk of default on each stock acquisition loan would be covered by private sector capital credit risk insurance and reinsurance (ala the Federal Housing Administration concept), but would not require citizens to reduce their funds for consumption to purchase shares.

Essentially, the pressing need is for everyone in a position of influence to encourage President Obama to raise the consciousness of the America people by making his NUMBER ONE focus the introduction of a National Right To Capital Ownership Bill that restores the American dream of responsible property ownership as a primary source of personal wealth.

This is the solution to America's economic decline in wealth and income inequality, which will result in double-digit economic growth and simultaneously broaden private, individual ownership so that EVERY American's income significantly grows, providing the means to support themselves and their families with an affluent lifestyle and to financially sustain them in their retirement.

The Just Third Way Master Plan for America's future is published at

Support the Capital Homestead Act at and

See "Financing Economic Growth With 'FUTURE SAVINGS': Solutions To Protect America From Economic Decline" at

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ABOUT Gary Reber

Gary Reber is a leading advocate for economic justice. He is the founder and Executive Director of For Economic Justice (, and an advocate and author for economic justice through broadened ownership of wealth-creating, income-producing physical productive capital. Mr. Reber is a member of the Center for Economic and Social Justice (CESJ) and the Coalition for Capital Homesteading. Mr. Reber founded with binary economist Louis Kelso, Agenda 2000 Incorporated in 1967 to advocate policies and programs to broaden productive capital ownership in urban development projects. Mr. Reber studied economic development planning at the University of Cincinnati, University of California, Berkeley, with doctorate studies at the University of Stockholm and Royal Institute of Technology, Stockholm, Sweden, and taught binary economics under John Dyckman, Chairman of the City and Regional Planning Graduate School at the University of California, Berkeley. In addition to other publications, Mr. Reber, for the past 21 years, also has published Widescreen Review, an enthusiast home theatre magazine and Webzine ( as well as Ultimate Home Design, a “green” sustainable movement magazine, now on the Web (, and is a producer of high-definition concert video specials. Mr. Reber testified March 7, 8, 9, 1973 as President of the Institute for the Pursuit of Economic Justice at Berkeley before The Committee On Ways And Means House Of Representatives––Ninety-Third Congress––On The Subject Of General Tax Reform and is the author of numerous articles published by The Huffington Post, Nation of Change and Op-Ed News, as well as nearly 2,000 major posts on the blog site.

Don't you realize what would

Don't you realize what would happen? A large percentage, probably at least one-third, of the people would still be faced with day-to-day survival during the transition to this utopian scheme. As a result, as circumstances press them, these folks would sell their "productive capital assets" to the financial class who understand the processes so much better, in order to raise immediate cash for their immediate needs. Thus, bit by bit, these assets would gravitate into the hands of the elite, just as it all does now. This scheme would end up being a new publicly-subsidized transfer of wealth to the already wealthy, while the working poor and at least part of the middle class would remain in their current plight.

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