Financing FUTURE Economic Growth With ‘FUTURE SAVINGS’
–– Solutions to Protect America from Economic Decline
http://www.nationofchange.org/financing-future-economic-growth-future-savings-solutions-protect-america-economic-decline-137450624
To change the rules and reform the system, the outcome of FUTURE policies must be to facilitate financing economic growth with "FUTURE SAVINGS," and simultaneously create new capitalist owners of wealth-creating, income-generating productive capital assets. "FUTURE SAVINGS" are profits used to repay loans for new capital formation and acquisition of existing productive assets by new owners.
Critically, we must recognized that Americans and the world's people do not have to end up desolute and bereft as the FUTURE unfolds due to fundamentally flawed assumptions in modern economics and finance: that new capital formation is impossible without first cutting consumption, saving, then investing. The result has been that the "supply of loanable funds" derived from past savings determines the "production possibilities curve" or rate at which economic growth can be sustained.
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The resulting problem is that to the extent that the savings investment approach increases production, the economic benefit accrues to the current owners, who re-invest to acquire more productive capital wealth rather than consume a growing portion of their capital incomes. This concentrates ownership even further.
What historically empowered America’s original capitalists was conventional savings-based finance and the pledging or mortgaging of assets, with access to further ownership of new productive capital available only to those who were already well capitalized. As has been the case, credit to purchase capital is made available by financial institutions ONLY to people who already own capital and other forms of equity, such as the equity in their home that can be pledged as loan security––those who meet the universal requirement for collateral. Lenders will only extend credit to people who already have assets. Thus, the rich are made ever richer, while the poor (people without a viable capital estate) remain poor and dependent on their labor to produce income. Thus, the system is restrictive and capital ownership is clinically denied to those who need it.
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