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The TerryReport

What is The TerryReport?


Doug Terry

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(Some) 2014 posts





The TerryReport

Proposal for a national citizens wealth fund in America



Here is a central irony of the grand success of America (and we are just that, no matter how depressive current attitudes might be): how is it that in the largest, richest single nation state in world history, some people have next to nothing or nothing at all? How is it possible that people go "ill fed and ill housed" in the midst of such abundance and success? Step back from the question a bit. What is it that "we the people" own as our birthright, beyond life itself? The air, the water, the natural resources (minerals, fossils fuels) and abundance of the land (fertility) are good starters. (Common human property.) Then, there is the infrastructure (airports, highways, railroads built from collective funds), yes, we own these things, too, because, even in small ways, we all pay for them, even if it is with regressive sales taxes. We own these things, yet only a minority quick enough, clever enough, or endowed with legal support to define and defend their activities, get to profit from the things we all own.

One way to address the issue of poverty in America would be for the national govt. to create a sovereign wealth fund to buy 10% of all major corporations in America and have that ownership assigned to every citizen. Americans could get dividends from all corporate profits. Individuals could cash out at any time and take a portion according to their age. We would all share in what we all own and build and we would all, to some degree, be rich.

Who could object? Would all the people in the nation owning a share of capitalism then be socialism? No. Another aspect of the peoples sovereign wealth fund would be to assign a portion of the royalties from mineral and oil extraction to the people themselves, instead of to the government. America original peoples, the Indians, have had such a fund (with mixed success) for decades where the money from oil and other leases is supposed to be set aside for their benefit. This was supposed to compensate them for the taking of their lands or for drilling/mining on lands they own by treaty.

The state of Alaska has such a fund to collect and distribute money from oil being pumped out of the ground. It is called The Alaska Permanent Fund Corporation and it took in 4.4 billion dollars last year, making it the highest revenue corporation in the state. No one is marching in the streets under the tea party banner insisting that this fund be shutdown.

The earth itself and the resources therein are a common human inheritance. Why should the benefits be limited to government and those who manage to exploit those resources? (Note: in most countries around the world, the governments assert complete ownership of fossil fuels and minerals taken from the ground.) If we are rich in resources, the benefits should be shared by the entire population (even if it is only a few dollars per year) and not assigned by the right of capture as it is now. One can only imagine how much money has flowed to those who exploit Americas resources without significant, direct benefit to American citizens. (There are many indirect benefits, of course, like low cost gasoline, which still exists in comparison to Europe, where taxes on the sale boost the price to the equivalent of six to ten dollars a gallon. Norway uses its high taxes on gasoline, pushing the price to nearly ten dollars per gallon, to subsidize college education. )

No one has tested these concepts on a wider basis because the government has generally acted for its own benefit (taxes, fees, etc.), while Americas huge corporations have done the same. If everyone acts for their own benefit and the laws are bent to create greater advantages for those who have wealth, how can ordinary, wage earning citizens progress? At the bottom of the economic pile are the poor and the near poor who start out life with next to nothing and often end up the same way. In any society, some people are bound to win and some lose (in  fact, how can you have winners if you dont have losers?).

While most people might not feel they have personal wealth to share, we are a very rich, successful nation and we pay a lot, right now, for anti-poverty programs that work to some degree, but fail to change the most basic fact for the poor:  after getting benefits, in whatever form, they are still poor. This would not involve a tax on citizens but an assignment of ownership, by purchase, to the wealth fund.

Suppose all American citizens got 40 or 50 thousand dollars at age 26 or 27. Would some people waste it all quickly? Of course. Would some people use it to pay off college loans? Yes. Some would go buy a new car and be broke the next day. Others would start  businesses, get additional job training, help an aging parent or even just take a year off (as they do routinely in England and elsewhere; its called the gap year) to enjoy traveling and being alive. Whats so bad about that? We dont own any of the wealth of America in our own names because we havent assigned ourselves any. Those who got there first made sure that almost all of the benefits would go to them and their heirs.

Corporate America might fear such a fund, because people would then no longer be so obligated to their jobs. The problem we have now, however, is there arent enough jobs that pay well. For whatever reason, corporate America cant, or wont, provide enough jobs for full employment. A fund of this nature could jump start America and help us return to the time when almost every American shared in the increasing wealth of the nation.

Doug Terry (originally a shorter comment for the NY Times online. 2014)

The Alaska Permanent Fund could provide a model for the nation. Here is the explanation of that fund from its website:

A dedicated fund owned by the State of Alaska

In 1976, as the Alaska pipeline construction neared completion, Alaska voters approved a constitutional amendment to establish a dedicated fund: the Alaska Permanent Fund.

Created by a constitutional amendment

"At least 25 percent of all mineral lease rentals, royalties, royalty sales proceeds, federal mineral revenue-sharing payments and bonuses received by the state be placed in a permanent fund, the principal of which may only be used for income-producing investments."


Is the idea of a citizens wealth fund un-American? Does it go against basic American values like hard work, earning your own way and the satisfaction of knowing youve worked for the gains youve gotten?

The first reaction: Ha!. Do the rich in America work for everything they have? Does someone making ten million dollars a year really earn that much? What makes their value so high, while the people who actually working with their hands, like workers on an assembling line, worth so little? Matt Lauer of the TODAY SHOW makes somewhere around 25 million dollars a year. Do the people who put the show together make three, four or five million? With, perhaps, one or two exceptions, the answer is no.

Did the retiring head of Exxon-Mobile deserve a retirement package a few years ago of more than 400 million dollars? Lets not argue about the details, the fact is that the wealth that went to him was generated by thousands of employees who will never see a million dollars in retirement and, at base, that wealth came from the common human inheritance of oil buried in the ground and produced by the earth itself over millions of years. Under our system, those who exploit natural resources, those who get there first, get all of the benefits while the government takes in money in the form of taxes and, where applicable, lease fees for oil drilling. Is this fair? Is this right or is this just the way things have always been done, therefore, they arent questioned?

All of the radio and television station licenses in America were given away free by the government, most often to people who were either already wealthy or who had at least, in the case of small radio stations, a minimal amount of wealth. Why should those licenses be kept forever by those same parties? The same question applies to the first round of cell frequency licenses. One set of frequencies was given, free, to all of the incumbent telephone companies. From that has come the two largest cell companies in America, AT&T and Verizon. Is this fair? Is this right, that wealth should be given to wealth and be retained  forever?

To believe that we cant have a system of greater sharing of wealth you have to believe that the current system is entirely fair in all of its respects or that we are incapable of coming up with something better. You have to believe that people who make millions a year, while others dont make enough to pay for all of the basic necessities, deserve to have those millions while others are deservedly poor. There might be elements of just results in these vast income divisions, but there are also elements of great unfairness, too. Regardless of these arguments, however, the idea of spreading wealth among a greater number of Americans would ultimately benefit everyone, rich and not so rich.

There is nothing un-American about a citizens wealth fund. It would simply recognize that we have enormous wealth and, second, that it is impossible to share that wealth on a wider basis through ordinary employment and in a system where having money means almost always getting more money without having to work.

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