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Economy Position Paper Topics covered below: 1) reprioritize; 2) productive work; 3) work as a vocation; 4) paying more or less; 5) downtown revitalization; 6) perpetual economic growth through consumption; 7) debt-free stimulus to community based projects; 8) Wall Street is history; 9) local investing options; 10) more local investing options (agrarian); 11) Society of Conservers; 12) demise of the middle-class; 13) co- operatives; 14) Mondragon Co-op; 15) less bonds; 16) colleges; 17) a new social security model 1) reprioritize Our economy should be tremendously jacked down, simplified and ideologically revamped. David Kurten is the author of the book The New Economy. In an article for Yes! Magazine he writes that we must replace a defective operating system that values only money, seeks to monetize every relationship, and pits each person in a competition with every other for dominance. This last statement speaks volumes about our current economy, our current American culture in general. On a macroeconomic level, we have, for too long, measured the for health of our country primarily by the size of our Gross Domestic Product (GDP). (The GDP is the market value of all final goods and services produced within a country in a given period of time.) This orientation has led to a U.S. mindset Â¦that values material wealth above social health, my wife Liz told the Bangor (ME) Daily News during a campaign swing through the New England states. In the Midwest, I interviewed Ohio Bluffton College Sociology Professor Jeff Gingerich. He said our country has economic indicators for practically everything. We know how many people are employed and how many people are unemployed. There are computer data banks showing what someone last three car purchases were. Other data will show how much a person is in debt, and to whom. More data will show if a person has started to shop more on the Internet. And yet more data will show, based on a persona net worth, where they fall in our socio-economic strata system (lower class, middle class, upper class But what about the amount of quality time someone is spending with their children? Professor Gingerich posed. To what degree is that person trying to help the environment, build community, be involved with civic projects, help the poor Who is measuring that? Should we be measuring that? Professor Gingerich said he believes we should be putting a lot more energy into detailing and measuring these types of quality of life factors. In fact, one of the professora class texts is: The Social Health of the Nation. The book proposes that there should be an annual National Social Survey that would start to provide ongoing tracking for these other categories. Categories that we believe should trump straight economics in regard to importance. And while there are versions of this type of National Social Survey in 15 European countries to date, there is, unfortunately, no similar formal survey in America. Our administration would push for one. Now on to straight economics 2) productive work In a broad brush overview, David Korten writes that for the last century or more) corporate interests have driven a governmental policy agenda that, for instance, gave tax preference to income from financial speculation over income for productive work. Korten writes: Unregulated speculation (stocks, bonds, etc.) is at the root of the current crisis. Society is better served by a system that favors productive work and investment, and limits speculation and suppresses inflation in all forms. And what is productive work Yorba Linda, California, author Steve Gerdsmier sees productive work as things that provide life support. That is, the basics around: food, medical, energy, education, transportation, clothing, communication During an interview with Gerdsmier, he told me that many jobs, at their roots, are nothing more than contrived paper shuffling and donâ€™t contribute much to the necessary stuff of life. Gerdsmier pointed to Buck Minster Fuller's book Critical Path. Fuller, who was the initial designer of the geodesic dome, writes that many of these paper shuffling jobs have evolved in the last century. And with them have come an economy (as David Korten points out) that geared toward making money, not necessarily making sense. Common sense. And according to Greasier, what makes sense is less marketers and more people working on organic farms; less financial analysts and more teachers; less public relations people and more local mechanics. And more good local mechanics. 3) work as a vocation What author Mathew Crawford believes is that the quality of craftsmanship has declined considerably in our society. And what is more, the impetus to be good at our work has commensurately declined as well. Crawford is the author of the book From Shop Class to Soul Craft. He uses the example of an assembly line. Workers on the line are often responsible for only one small, repetitive (and often mind numbing) job. And not only don't they see the finished product, but they don't see who the finished product goes to either. And this is the same for cars, furniture, appliances, bicycles; In the old days, for instance, there was a bicycle shop in every town that manufactured, sold and repaired bicycles. The community was dependent on the bicycle merchant's craftsmanship. And the merchant was motivated to make the best product possible because he/she was selling to one's neighbors. In South Bend, Indiana, I interviewed Daniel Baker, who was in the formative stages of starting a small auto-mechanic shop based on the principles in Crawford's book. Baker said the interdependency between craftsman and local community is key. And, unlike the relative anonymity of the assembly line worker, his work will be open for criticism and critique. Which, ultimately, will make him a better craftsman, he said. Taking another page from the new capitalism Crawford writes about, Baker also said that by knowing his customers intimately in a small community setting, it will put himself in a better position to make more moral decisions about his work. As an example, say that the car being brought to him for repairs is owned by the father of a big family. And this father works at a relatively low paying job. (Living in a small, close-knit community would allow for more of this kind of knowledge.) Baker said the father's low paying job, and number of children, would indeed influence how much he charged. In South Bend, I also talked with a Notre Dame University theology professor who does salary sharing in her personal life. That is, she takes part of her salary each month and shares it with a low- income family that does a lot of non-paying volunteer work in the community. In essence, work would not just be about our current predominately business is business orientation; but rather work would be about carrying out a vocation on several levels. And thus, another component of The New Economy. 4) paying more, or less In The New Economy, as the mechanic, merchant, and so on, have more of a proclivity to help out some of their customers with lower fees; some customers, who were more well-healed monetarily, may, reciprocally, be inspired to help certain merchants more as well. For instance, if some of these customers know a merchant has a good number of children, and/or is in a business slump, or they might, say, pay more than the item(s) listed price. Our family has done this a number of times.For instance, on the road we bought a screwdriver that listed at $6 for $20. It was a small town hardware store that was struggling to stay open in the face of the local Wall Mart and Home Depot. Likewise, there is a restaurant in Mt. Vernon, Ohio, that has suggested prices on the menu. The concept is for those more well off to consider paying more for the food, which then might subsidize a person, or family, who are only able to pay less than the suggested price. On a micro-economic level, this would be akin to a pay it forward concept from individual to individual. On a macro-economic level, this would move us toward much more of a: Ã¢â‚¬Ëœsociety of voluntary sharing. 5) downtown revitalization I told the Brattleboro News in Vermont that The New Economy will revolve around the revitalization of downtowns (again, like in the the old days, where small Mom & Pop shops will make a big comeback as the monopolies of Wal Mart, Kmart, Target, Home Depot will be broken up. And local people will be vested in these conglomerates not coming back. Some people are already expressing this. During a campaign stop in Yellow Springs, Ohio, we learned this town rose up against the proposal of big box stores going in on the outskirts of town because of what it would do to the integrity of the downtown. Protestors flooded the local newspaper with letters-to-the-editor. NO SPRAWL! Signs went up in many front yards around town. And a referendum petition was circulated. The strip mall developer backed off. On a stop in Fairborn, Ohio, we interviewed a man who had come up with a pre-emptive way to head off the big box stores, while going beyond to support the locally-owned, small stores. Bob Jurick goes about town every January with written pledge to various businesses he will use that year. He actually pledges to spend so much money (it varies from store to store) in the upcoming year to each of these stores as long as they stay small, independent and locally owned. Jurick told me that because of these pledges, although unintended, he finds many of these stores reciprocate with giving him quite good deals because they are so appreciative of the sentiment, and extra support. Like a small grocer in Yellow Springs is quite appreciative. This grocer had been located in the Yellow Springs downtown area for years. But now, more and more people were driving 10 to 20 miles to big box grocers elsewhere for cheaper prices. The grocer was about to go out of business. However Community Services Inc. in Yellow Springs, a creative non-profit to promote community building in the town, held a town forum to educate people about why it's important to shop locally. The forum included a testimonial by the grocery store owner explaining the straights he was in. Subsequently, the town rallied behind the grocer. And five years later he was still in business and doing well. Again, the key in The New Economy will be to keep things small, with as much local production for local consumption from town to town. One of the best examples of this downtown revitalization is in Platteville, Wisconsin (pop. 9,000). Their Main Street Project follows a four-point approach. Regular downtown events are planned. There's a newsletter. Forums are conducted to educate consumers on why it is important to shop downtown. And there is regular recruitment of downtown businesses. On a stop in Platteville, Main Street's president Bob Metzger told me that as these new businesses locate downtown, another dynamic is starting to unfold as well. That is, a number of business owners (including Metzger) are moving into apartments above their stores. Main Street becomes our front yard, he said, explaining this is even more motivation to make the downtown as attractive as possible. 6) Perpetual economic growth through consumption? At the core of our economic problem's David Korten writes that in our modern economy, nearly every relationship depends on money. This, in turn, gives ultimate power to those who control the creation and allocation of money. Currently, the issuance and allocation of money is controlled by private banks for the excusive benefit of top managers and shareholders. The money issued by these banks as debt must be repaid with interest. This requires perpetual economic growth through consumption. So, in essence, more and more goods get created. Advertisers create more and more of a demand for these goods through media manipulation. And many people in society end up with a glut of stuff and debt. The average American household now maintains 12 credit cards (and is, also on average, some $10,000 in debt). What's more, when it comes to borrowing these days, many households are doing it to invest (in stocks, bonds, basic home improvements, etc.), but rather they are borrowing to spend. And this escalating spending / debt cycle has, ultimately, led to the current financial crisis. As New York Times columnist David Leonhardt puts it: It's your fault. Part of it is anyway. You, the American consumer, spent too much money. You bought too much home, took on too much debt, and generally lived beyond your means. Your free spending ways have helped cause the worst financial crisis since the Great Depression. And now you are going to have to do your part to end the crisis. How? By spending more. Therein lies a significant part of the problem. Anne Wilson-Schaaf wrote the book When Society Becomes an Addict. Her contention is modern American society is rife with addictive compulsive behavior across the board. And this includes us becoming spendaholics. What is called for is economic sobriety within a new kind of economic system. It would be a system where it's easier to do good -- for the common good. 7) Debt free stimulus to community-based projects David Korten believes we must reboot the economy with a new, values based -operating system designed to support social and environmental balance. This, again, is very much in line with what we propose. The new system must be locally rooted in strong communities with an eye toward the common good of all. The government stimulus money should not come from borrowing money created by the same private banks that got us into this mess, writes Korten. Instead, the government should issue debt free money that will flow to community -based projects to help revitalize Main Street market economies. It is our belief big national banks should be viewed as monopolies as well. They should be broken up and their branches sold to local investors. They, in turn, should be chartered to serve Main Street needs, lending to local manufacturers, merchants, farmers, homeowners. In Mt. Vernon, Ohio, we met with Kelly Schermerhorn, who oversees a Credit Union in Mt. Vernon and lectures nationally about issues relating to credit unions. He explained that credit unions are primarily democratically governed financial co-ops that are, basically, owned by their customers. He said this symbiotic relationship lends itself to heightened levels of camaraderie and more of a focus on supporting the local community. For instance, the Federal Credit Union in Evansville, Indiana, (also featured in Yes! Magazine) is a small collective with about 7,500 members. They have a united interest in improving life in Evansville. They, for instance, have a focus on green energy for the town. And the credit union often loans to people and businesses undertaking, say, solar projects. 8) Wall Street is history Korten, again, believes we should let Wall Street go and rebuild a Main Street economy. Korten believes financial speculation, on a national and international level, is nothing more than legalized gambling. We do too. As an example, the average investor never visits the companies they invest in. And most investors tend to treat stock ownership as an abstract financial arrangement. The average stock investor hangs on to their investment for less than one year now. Korten says financial speculation does create real wealth, serves no public interest and should be strongly discouraged. Again, Wall Street should go away. How he proposes that happen is to tax the purchase or sale of financial instruments and impose a tax surcharge on short-term capital gain. Make it illegal to sell, insure or borrow against an asset you don't own, or to issue a financial security not backed by a real asset. This would effectively shut down much of Wall Street. Then: 9) local investing options The money that has been used for financial speculation must be redirected to productive, local, socially responsible investment. For instance, in the face of the mounting global warming crisis, people in towns in the Great Plains states (America's Saudi Arabia of wind) could invest in local wind turbine projects getting a return on energy sold to local power plants. The same could go for, say, solar projects throughout the Southwest. During my research, I took a four-year look at Bluffton, Ohio (pop. 3,877) for a series of America's Best Town books. This town had a lot of elements of The New Economy, which will be referred to throughout the rest of the paper. While in Bluffton, I attended a seminar on for Socially Responsible Investing. Mark Reiger is a stewardship representative for the Mennonite Mutual Association. MMA manages an investment fund of $1.2 billion. Reiger said when looking for companies to invest in, MMA weighs such factors as: How environmental conscious a company is? Does the company pay a fair wage? What kind of social justice cause, if any, does the company back? MMA, for instance, invests in major U.S. coffee companies that support fair trade coffee. Now in the same spirit, with this new jacked down economy. First Mennonite church in Bluffton would develop a fund of its own. In essence, this would become a local mutual fund. And they might invest in the Ten Thousand Villages store in their town. A big item at Bluffton Ten Thousand Villages is fair trade coffee, and other fair trade art work, sculpture, knitted clothesÂ¦ from villages in the Third World. Bluffton also represents another twist to local investing. Several years ago, a group of Blufftonites formed a board and started an S-Corporation for the Common Grounds Coffee Shop downtown. They sold Common Grounds shares at $1,500 a share. Some 62 town people bought shares. What's more, some of these shareholders put sweat equity into the place, helping to rehab the building. Common Grounds manager Pet Suter told me that the shareholders did not invest because for they thought they were going to retire early They did it because they thought such a venue would be good for the town in bringing people together. And therein, again, lies the ethos of The New Economy. 10) More local investing (agrarian) A big component of The New Economy will be a shift back to a much more decentralized, organic, agrarian based society. Our administration, for one, would push to classify mega-corporate farming as a monopoly, and break this up. In turn, we would provide a multitude of incentives for re-invigorating the establishment of the small family farm, en masse. This was once the backbone of our country. And we believe it should be again. With this restoration, we would also promote much more local food production for local consumption. One economic investment avenue in this new context would be for community sponsored agriculture. Bluffton, Ohio, had one of these as well. With produce now traveling thousands of miles from field to table, we have lost the connection between local farm, land and consumer, TR Steiner told me. His Red Oak Run Farm offers people per share ( $390 a full share and $200 a half share for a growing season. In return, shareholders receive weekly produce from the farm. What more, if a full- shareholder chooses to work 10 hours on the farm, they get $100 off. And if a half-shareholder works five hours, they get $50 off. People say that generous said TR.But I think farm labor should be viewed as a valuable thing in our society. Holy Cross College theology professor Mike Griffin is in the formulating stages of a class on the dynamics of local food loops. He said these are excellent examples of what he terms the "Economy of Communion" While in South Bend, Indiana, I talked with Professor Griffin. He said being interdependent on the stuff of life for people in a town can't help but to get them to form commune together more. In Athens, Ohio, organic farmer Art Gish told me the conversations he has with town people at the Farmers Market each week is as important to him (if not more important) than the actual sales. Because, he said that he truly values community building. Back in Bluffton, a Kitchen Co-op has developed around local food. A circle of families have begun bartering homemade granola, homemade bread, homemade yogurt. Each item is assigned a value in so many co-op coupons. Kitchen Co-op co-founder Wendy Chappel-Dick told me that the co-op has been a great community enhancer among the members, because more and diverse conversations are continually started around the bartering of foods. 11) Society of Conservers During a round table discussion sponsored by Sierra Magazine, Lord John Browne, who is the group chief executive of British Petroleum, offered the following rather startling comment (at least it was startling for someone in his position): I, too, believe in market economies, but I question whether technological growth can keep us ahead of the consumption wolf particularly if you are trying to export a consumption based economy to the whole world. It seems to me that at some point we need to say enough is enough. We, too, believe a consumption-based society (at our current consumption rate) is not sustainable as well at this point. Actually, instead of being a Society of Consumers, we would be much better off becoming a Society of Conservers. As an example, lets go back to Bluffton, Ohio. Another closed loop local initiative is First Mennonite Church's Lending List. Items are categorized. Under Kitchen/Food are: blenders, dehydrators, ice chests canning equipment Under Camping Equipment are: sleeping bags, tents, lanterns And as this works among church members, it would work from neighborhood to neighborhood. In jacking down the economy, we must curb our consumption. As we do this (house sharing, sharing items, we will decrease our need for as much capital. This, in turn, will allow more people to go to job sharing, opening up more time for faith, family and community. (The types of things, again, that we would be tracking with the new National Survey.) What's more, by sharing more, it could also free up more money for those in need. If we Americans learn to live within our means, we will free up resources others need to feed, clothe and house themselves and their families, Korten wrote. 12) demise of the middle-class According to the book The New American Poverty, author Michael Harrington notes that around 1840 (both in American and England), the upper class adopted a set of Victorian values that then permeated down to the lower orders in the emergent cities. That is, there was a premium placed on such qualities as thrift, order, industriousness, sobriety, the mastery of passions and a deep regard for the future. Some of those in the lower class started to adopt these as well. This moved some people from the lower class to a rapidly emerging middle-class, one that continued to grow almost unfettered until the 1920s. It was at this point, Harrington notes that the educated classes in the U.S. started to repudiate the old values. By the contemporary period, there was a collapse of the Victorian popular culture and the moral legitimacy of the institutions embodying it. This started to give way to another emerging ËœMe Generation, with a general conviction that the old constraints did not apply. This, incrementally, got worse, and worse, as the ruling financial elite continued to consolidate more and more wealth and power. In kind, the middle class diminished. David Korten writes that these fiscal elites used their control of fiscal policy to conduct a class war that has decimated the once celebrated American middle-class. Korten believes there should be much more of an equitable distribution and that way more individuals contribute to the economy as, not only workers, but owners. And one of the best ways to bring this about is through co-operatives. 13) Cooperatives A cooperative is a jointly owned and democratically controlled enterprise. In Cleveland, Ohio, I looked at Orange Blossom Press as an example. This printing company was started as a cooperative in 1976. Although the company dynamics have fluctuated over the years, at one point some 15 employees owned equal shares and had an equal vote in what went on at Orange Blossom. The company was started by a group of people who were active in local politics, social justice and the environment, said Donna Larrivee-Cohen, who has been with Orange Blossom since 1983. And as Orange Blossom exists as a cooperative, on the agricultural front so does Eat Food For Life Farm in Yorkshire, Ohio. It has established an organic food cooperative. Six organic farmers throughout Darke County here have come together to start a food store at the Eat Food For Life Farm. They sell organic eggs, bread, beef, and chickenÂ¦ with each farmer having a stake in the business. Also from an investment angle, local people could have helped with start up or ongoing rehab and expansion in return for dividends. Or, people could buy shares for a return of so much food a month. There is a U.S. Federation of worker owned co-operatives. Melissa Hoover, its director, says they have recently seen a spike in calls requesting technical assistance, information and loans to start co-ops. There is also a National Co-operative Business Association. The non-profit sector is spawning a good number of co-ops. For instance, Yes Magazine notes that Green Workers cooperatives have started in the Bronx, New York, for the establishment of a network of green businesses. One of those businesses is Rebuilders Source, which is a discount retailer of used and surplus building material. It is an alternative to the landfill for some 1,900 tons of construction waste generated in the Bronx, New York, every day. (This, too, was reported on in Yes Magazine.) Our administration would provide incentives for similar networks of non-profit Ã¢â‚¬Ëœgreen co-ops to start up in every town in the country, as a way of combating global warming and other environmental problems. For instance, in Nebraska City, Nebraska we researched an Urban Forestry Model to plant 10,000 trees in this town of 7,000 people. In New Mexico, we looked at a Southwest Sustainability Project to retrofit homes with better insulation and alternative energy sources, like solar panels and wind turbines. And these might fall under the category of non-profit cooperatives. For the private sector, point to the Mondragon Cooperative Network in Spain. 14) Mondragon co-op In South Bend, Indiana, I interviewed Elliot Majors, who gives presentations on the Mondragon Cooperative Corporation (MCC), which is the largest group of worker owned companies in the world. Majors said it was started in 1955 and was initially in the town of Mondragon, Spain. He explained it was started by a Catholic priest, Fr. Don Jose Raimondi, to promote what the church refers to as redistributism. Distributism is about creating a society where everyone has enough and he gaps between rich and poor lessen significantly. Distributism is actually a third way economic philosophy to apply the principles of Catholic Social Teaching. The belief is that ownership of the means of production should be spread as widely as possible among the general populace Ã¢â‚¬â€œrather than being centralized under the control of the state (state socialism), or a few large business or wealthy individuals (plutarchic capitalism). In these worker owned companies, there is a relatively egalitarian wage, with top management being rarely paid more than six times the lowest paid worker. According to Yes Magazine, there is also no unemployment in MCC. Rather, if there is slack time in one business, workers are moved around to other businesses. MCC companies employ more than 100,000 worker/owners. Worker/members do buy into these jobs, but there is often additional start up capital. So some workers shares of company profits are pooled in a bank owned by MCC. The bank, in turn, offers loans to new MCC business start-ups. The piece in Yes Magazine ends with a description of the town of Mondragon. The writers explain there are neither mansion on the hill, nor poverty in the streets but everyone had a comfortable place to live, healthy food to eat and the comfort of modern conveniences. Mondragon is proof that a commitment to the common good is not an obstacle to commercial success. 15) less bonds Under our administration, the Federal government would shrink significantly. And we would highly discourage deficit spending. Consequently, there would be little need to issue government bonds to cover the cost of projects. Bond are issued to raise capital by selling loans. This has, for one, become a huge problem on the international stage. For instance, foreign government has been big buyers of U.S. Treasury Bonds. China, for one. According to an Associated Press article, Washington has little leverage over China (like bringing pressure about glaring human rights abuses there) Â¦because the U.S. depends on China to finance the U.S. governments growing debt. This is an absolute travesty. In The New Economy, while you could not legislate this from a national level, we would like to see the issuance of municipal bonds (for states, counties, municipalities, local agencies and school districts shrink considerably as well.) This, too, is merely deficit spending. In Atwood, Kansas (pop. 1,500), we researched the Second Century Fund. This was a voluntary fund started to help with benevolent causes throughout the town. For instance, the money was used to help with purchasing extra textbooks at the local schools, or for city park projects, or for road projects that needed more funding. In this town of 1,500, over 10 years, some $1 million was raised. The interest alone on this fund each year was quite significant. In fact the year we were there, some $73,000 in disbursements were given to various projects just from the interest on the fund that year. People donated to the fund out of a sense of civic responsibility. Note: In a Society of Conservers, people would not be as quick to, say, scrap the old high school and build a new one. But rather they â€˜would be more apt to rehab the old high school at much less of a cost. For us to live within our means will invite frugality and ingenuity. Note 2: We have become a society of compulsive debtors. There is now a 12-Step Group called Debtor's Anonymous. In Alcoholics Anonymous, people operate on the paradigm that they Â¦just don't drink today Likewise, in Debtors Anonymous, people operate on the paradigm that they just don't debt today. We as a nation at this point would do well to incorporate this way more in the federal government and in our own personal lives. 16) colleges In the long term savings category, the second most expensive endeavor (after retirement savings) is college tuition. And college costs are currently rising at twice the rate of inflation. In the year 2006, four full years of private education cost, on average, $120,000. For a public university, the average was $48,000. The 529 Savings plans are sponsored by each state and there is no tax on this money. (Grandparents and even friends of the family can open a 529 plan for a student.) 529s invest in a mix of stocks, bonds and cash that are managed over different time horizons. There are also Cloverdale Education Accounts. These, too, are tax sheltered. However, these have a broader definition of what can be saved for (tuition, books, fees, room and boards and can also be used to pay for private elementary and high schools. These are not state sponsored and can be established at banks, brokerage firms and mutual fund companies. So how might this look in a jacked down, decentralized economy? Since financial speculation for the most part will be gone (as mentioned earlier), at the front end, in a slowed down and retooled, decentralized economy, there would be more of a premium placed on the trades (and hands-on apprenticeships) and small scale, labor intensive organic farming. This would significantly decrease the number of people pursuing college. Secondly, colleges would be re-tooled. Currently, many liberal arts colleges require so many core classes in one major, supplemented by a good number of electives to get a degree (and supposedly, a well-rounded education). We would propose these colleges offer, besides a four-year liberal arts curriculum, a two-year, fast track degree that primarily include courses just specific to ones major. This would cut college tuition costs in half for many and give them a respected degree in this new economy. In addition, we see as a tremendous monetary waste all the students who go through their college years majoring in something only to find when they start doing the actual job not for them. So we propose the Antioch College model. On a research stop at Antioch in Yellow Springs, Ohio, we learned students here are on an alternating study/work program. That is, students attend classes for a semester, then intern in their field of study for a semester. Then it is another semester of study and another semester of work. This way students get a tremendously good, hands-on feel for the field they thinking about entering. And businesses, for reduced wages, get good intern help. We would also put a tremendous premium on students who stayed local, for green purposes and continuity of community in their own hometown (or close by).We, for instance, would propose tax breaks for this. This would also open a market for more community colleges nationwide. Note: The traditional way we currently do a lot of college, has set the stage for a tremendous fracturing of community and a jumping off point for families to start to split up all around the country sparking all kinds of long-distance, global warming gas travel and a significant breakdown of community). 17) a new social security model In a jacked down, decentralized economy, where, again, Wall Street speculation goes away, retirement security would have to be approached in another way. (Some two-thirds of American workers currently have 401k savings.) For most Americans, a working career will typically last 40 years. And retirement can last 25 to 30 years thanks to modern medicine, etc. While some people (a minority at this point) have access to traditional guaranteed pensions from their employers, a majority has turned to 401k plans through their employers. (Some two-thirds of American workers currently have 401k savings.) While other people go with government sponsored IRA accounts, which can be set up through financial service firms. However, again, with Wall Street financial speculation going away, we must come up with a series of creative strategies to create social security for seniors in each community; I told a newspaper in Champaign, Illinois. So what would that look like? In our proposal, the IRAs, 401ks, etc., would be cashed out. There would be no capital gains tax on this liquidation. (Or the money could be rolled over into local investment options.) For instance, the government currently has a category for Small Business IRAs. The money could roll over into this, with a decentralized version of one of these set up through the local municipality and predicated on investing in local ventures. Also, currently your average American wage earner can expect 57% of their pre-retirement salaries from age 55, with middle-income expecting 40% and high income 33%. Concurrently, senior expenses often go down. For instance, offspring have moved out of the home. Often the house has been paid off so there is no mortgage payment. There is the possibility to down sizing to one car now that neither spouse is working (if that's Also, in this new economy with a premium placed on families staying close by in community, part of the safety net becomes, well, family. As it was in the old days. For instance, in San Antonio, Florida, we looked at a family who had converted a basement into an apartment for the in-laws. They shared house expenses and the grandparents helped with the children. In Amish communities, parents often build additions onto the home for children who marry. In Amarillo, Texas, we met with the extended Barbosa family. They had moved into three homes near each other on the same block, sharing tools, lawn equipment, the cooking of meals And for those seniors who don't have families close by, we looked at the non-profit Friends of the Elderly model in Houghton, Michigan. Here volunteers adopt seniors for companionship, helping around the house, and so on.
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