Are the Rich Really Getting Richer?

The excutive salary increase for 2003 was about 28%. Did you get a 28% pay raise last year?

Those in Wall Street and many economists want you to believe that if wages increase, that's bad; but if company executives pay increases astronomically in comparison to wages, that's OK.

Returning the surpluses to the people will cause such an increase in jobs that companies will have to pay higher wages in order to get and keep employees. Maybe then they will not be able to give themselves a 28% pay increase each year by keeping employee wages down. The threat of companies closing their U.S. operations and moving overseas, encouraging illegal alien migration to the U.S.A., outsourcing of jobs, and not enforcing trade agreements, all have discouraged employees from receiving adequate wage increases commensurate with the supposedly booming economy of the '90s. The booming economy has benefited the top 10%, not the rest of us.

10% Own 73.2% of U.S. Wealth

Another Wall Street Journal article was entitled, "Wealth Gap Grows: Why Does It Matter?" It stated in summary:

"…Yet, the gap in wealth-which includes investments in addition to paychecks-between the richest Americans and everyone else has continued to widen…"

"…Only 43.3% of all households owned any stock… Of those, many portfolios were relatively small. Nearly 90% of all shares were held by the wealthiest 10% of households. That top 10% held 73.2% of the country's net worth, up from 68.2% in 1983." (Emphasis added.)

The article stated "households", not governments. Now add to the 73.2% the surpluses held by governments and the amount owned and controlled by the wealthiest 10% will probably exceed 90% or more of the wealth of America.

When Does Communism Exist, 73.2%, 90%, or 100%?

Remember, communism is a concept or system of society in which the major resources and means of production are owned by the community (governments and a few individuals who control governments) rather than by individuals. In theory, such societies provide for equal sharing of all work, according to ability, and all benefits, according to need. Some conceptions of communist societies assume that, ultimately, coercive government would be unnecessary and therefore that such a society would be without rulers. Until the ultimate stages are reached, however, communism involves the abolition of private property by a revolutionary movement; responsibility for meeting public needs is then vested in the state.

The special elite decide on how the wealth will be distributed among the people. All life styles, standard of living, actions, thoughts, and even life itself is decided by the state because the state owns and controls everything. Is it possible that communism could be created within a capitalistic society without a revolution? Have we already reached that point?

Returning Surpluses Reverses the Trend

Returning surpluses to the people will reverse the trend of wealth transfers and increase the percent owned and controlled by 90% of the people. This increase in people-control could greatly assist in restoring the "Republic" form of government outlined by the founders. Although this not a cure, it is a step in the right direction.

Interest Rates

Just think of how far credit card interest rates would fall if millions of Americans started paying off or paying down their credit card balances. This by itself would provide a tremendous savings to all credit card users and savings on mortgage loans, home equity loans, auto loans, etc. The current usury rates would no longer exist.

Increases in interest rates hurt 90% of Americans' standard of living and increase the profits of financial institutions that lend money.

Whenever inflation is a potential problem, interest rates are raised in order to discourage increases in economic activity. But raising interest rates also helps lenders and the top 10% but not the 90% of Americans.

Federal Reserve

Did you know that the Federal Reserve System is not a Federal agency. The President does appoint the Chairman of the Federal Reserve System, which implies to the public that the Federal Reserve System is a government agency. Actually, the Federal Reserve System is a privately-owned banking monopoly owned by member banks.

On December 23, 1913, Congress passed the Federal Reserve Act. Mr. Lewis, a private citizen, was injured by a Federal Reserve vehicle and sued the U.S. government.

On April 17, 1982, the court ruled: " ...that since the Federal Reserve System and its twelve branch banks are private corporations, the federal government could not be held responsible." Lewis vs U.S., 608F 2d 1239 (1982)

So when the Federal Reserve raises interest rates affecting 90% of Americans are they doing this to assist Americans or their member banks?

Under the plan proposed in this site, paying-off or paying-down consumer credit card debt will provide credit card companies, banks and financial institutions a tremendous increase in cash which they will have to invest somewhere, a large portion which will probably go into U.S. treasuries. The private (not national) debt reduction plan will accomplish the following, all of which are good news for the 90% of Americans, even businesses:

* Cause interest rates to decline, especially usury credit card rates.

* Provide investments in the U.S. to offset the current-account gap providing less dependency on foreigners to affect our economy and future.

* Lower the interest rates on the national debt because of large purchases of treasuries and lowering the taxes required to make payments on the national debt.

* Lowering the interest rates on individuals will also lower rates on businesses, which will reduce the inflation effect on prices.

* The lowering of taxes on businesses will also reduce inflationary pressures because profit margins would increase without the necessity for price increases.

Politicians and Wall Street Want You to Fear Inflation

It is commonly preached by Wall Street and the news media that wage increases for 90% of Americans is bad because it can create inflation and erode the purchasing power of the earnings of Americans.

"Inflations results when actual economic pressures and anticipation of future developments cause the demand for goods and services to exceed the supply available at existing prices or when available output is restricted by faltering productivity and marketplace constraints. When the upward trend of prices is gradual and irregular, averaging only a few percentage points each year, such creeping inflation is not considered a serious threat to economic and social progress. It may even stimulate economic activity. The illusion of personal income growth beyond actual productivity may encourage consumption; housing investment may increase in anticipation of future price appreciation; business investment in plants and equipment may accelerate as prices rise more rapidly than costs; and person, business, and government borrowers realize that loans will be repaid with money that has potentially less purchasing power." ("Inflation and Deflation," Microsoft® Encarta® Encyclopedia.)

There is a basic principal prevalent among economists that when demand for goods and services increases substantially and supply cannot keep up with demand price increases are certain to follow causing inflation. But they agree that this can be a temporary situation because when profit margins reach a certain level competition will increase thereby providing the supply necessary to meet the increased demand and prices will stabilize or be lowered, especially when supply starts to exceed demand.

Granted in the short run if large scale surpluses are returned to the people, prices would increase because of increased demand. But with the free market having so much more investment capital available competition and supply will increase in those areas where the profit margins have increased substantially, and prices would begin to stabilize as supply meets demand. We believe the "wolf" cry and "the sky is falling" about inflation would be short lived.

Dr. Ratajaczak Says It Ain't Necessarily So

Dr. Donald Ratajczak, Director of the Economic Forecasting Center and Professor of Economics at Georgia State University is a nationally and world known economist. His credentials cover a couple of pages of type. In his June 24, 1999 article in the Atlanta Constitution he diluted some of the myths on wage increases and inflation. He said "...While some linkage exists (pertaining to the Phillip's curve), wage changes can be absorbed without price changes if productivity is strong. Also, economic growth will lead to more employment, but more people may also be pulled into the work force. Furthermore, better tools in the hands of existing workers rather than more workers may account for most of the gains in output. In other words, any relationship between inflation and economic growth is tenuous at best."

Conclusion: Wage increases do not mean automatic inflation pressures.

History Repeating Itself?

They say communism is only one step away from socialism. In this country we have been following the historical society cycle: Republic - Democracy - Socialism - Oligarchy - Communism or Dictatorship- Revolution and the cycle starts over again. But it usually starts with Democracy not a Republic as we did in 1776.

Someone Thinks There is Something More Important

Can you think of any other item that could do more in our society or provide as many benefits as returning surpluses to the people?" When we asked one person this question, he responded, "Yes - declare Washington, D.C. a foreign country with its occupants having no immigration rights."