Sustenance from the fire
...a proposal to save the U.S. Social Security System

The date is January 20th 1999.  Last night I heard President Clinton give his State of the Union presentation.  This morning I also listened to Chairman Alan Greenspan of the Federal Reserve Board speak to the House Ways and Means Committee, commenting on the state of the economy, and remarking in opposition to the President's proposal to invest Social Security funds in the private sector ... though agreeing with the President that some action mechanism is needed - indeterminate at this moment in time - to help the national pension fund keep pace with future resources vs future draw.

What is interesting, is that over the past few weeks and recent days, there has been active internet discussion on GAIA-PC about possible ways to re-organize free commerce markets, in order to have equity and sustainability in the global market place of the 21st Century and beyond.  Meaning - there is a concerted quest how to incorporate and look out for the general welfare the people of the planet, regardless of age, health, culture or economic productivity.   Within the context priority of ecological sanity ... keeping ecological stresses and abuses to a minimum ... the Gaia-PC conversation headed toward familiar debates about everyone pulling their own weight versus governed greed versus gifting programs to help the less fortunate or able.

Jubilee - debt forgiveness - seems to be the ready solution for disproportionate financial credit sheets, if only as a tool of last resort, not as a daily policy or de-facto remedy.  "Subsidies" though are the corollary process already in place, being tantamount to the same thing in net effect as "debt forgiveness", differing only in the tacit acknowledgement that some sectors don't have sufficient funds funneled back into them and need an assist to make sure they stay thriving.

Public investment strategies to date run at 1-3 % less productive than their private sector counter parts, Chairman Greenspan noted.   But, giving effective carte blanche resource reallocation privileges to a small group with potentially political and vested interest ties, is to court extreme mis-use and danger to the established equity of Social Security funds.  And, there is always the implication that new and impermanent managerial teams might not always be in conversational agreement with global peers.

None the less, some way of improving and ensuring the capitalization of the national pension assets has to be found.

The Integrity Paradigm has a specific view of financial dynamics as integrations of interaffected linked systems.  The flow and channeling of financial energy units is a creative one which produces goods and services where none existed before.  Order, equity and utility emerge on a regular basis.   But the unique perspective of Integrity is that context and frames of reference are many and variable, and there are many ways for interactions to occur, there are many levels to tap into in order to generate energy and to draw energy from.

Just like the heat of a fire to warm a boiler and produce steam energy, or heat a pot and cook food, the fire generates residual collateral light, and warmth in the place around, that people can approach and draw comfort from as the excess energy follows the laws of physics and chemistry and floods the world around with its glow and heat.    The process itself can be used, not just the end product of  steam to run machinery or food to run our metabolisms.

We trust in the free market to remain robust and growing, ticking away both in good times and in bad.  Until now priority has been placed upon the quality of performance, and, percentile taxation rates on profits - used to shunt portions of the created energy to other parts of the body-economic - has been the most widely used tool to take care of other social needs.

And, if saving monies in small secured accounts with a modest rate of return is desirable, we exist in an era where the rate of return is becoming more important than the security of equity.  Because, no matter our intention to rein in inflation, 're-valuation' is a dynamic built into the transaction and exchange system.  Since the blurring of lines between banking and credit and investment agencies, the image has become : "any place I park my monies is a 'savings' place". Ergo the President's suggestion that the stock market - which is performing so well these past few years - is assumed a safe haven, capable of generating more than the previous shortfalls of income for the national pension.   But up is not always up and there are no absolute guaranties on performance, let alone rates of performance. 

Still, there must be someway to link the benefits of a free market to the needs of the social body, not just a relatively small group of able investors.

I suggest there is.  Not by putting our hands in the fire, nor taking out firewood so that the fire diminishes it's energy, but by standing aside the warm glow of productivity and being nurtured by its living on-going heat.

Rather than investing in the market place with capital funds that should remain secured and inviolate to market changes up or down, there should be a small transaction/transfer tithe, in the neighborhood of several mil or cents per unit, irrespective of the prices of shares, or bonds or collateral.   Amounting to no more than a process fee as typically taken by any broker or trading house to cover expenses, this would not be a tax, nor would it have to be varied or adjusted once established, and it would not penalize any profit-potential of any investor.

One cent per share unit - even one quarter of one cent per share unit - traded would never be significantly missed by a seller or buyer.  But, the flood of funds gained in a sustained flow, based on the units of transaction - which reside in the confidence that economies will stay active to produce for a thriving growing world, would gain immensely.  It is a fact that loans and distribution create wealth in factors of several multiples every day.  To shunt even a maximum of one cent per unit transfer of that created wealth into sustenance of the general welfare is a pittance well spent.   The elderly and ill will receive the due rewards of a system they helped create and nurture, and they can bask in the glow of the system that can take care of itself, and them too.   The link and integration would be forged and the previous systemic stresses removed.

Every healthy biological system has mechanisms for re-storing energy internally, and for nourishing all of its "body parts" whether they are actively engaged in somatic processes or are there as scafolding, as reserve, as future, or as past performers.  Humans value the displays of hair we have.  There is value in the warmth and in the cultural signals that we assign to its styling.    But hair is dead cells.  If our bodies did a balance sheet on whether or not to keep hair follicles as nourished as the heart or brain, based on the fact that metabolically hair didn't contribute to the health of the body as much as the heart or brain, we would be living in quite a different world.

Small tithes of energy flowing to non-critical parts of the body-politic is just as important.  But hair growth doesn't have to be tied directly into the adrenaline system and respond with more hair when the rest of the body is responding to real-time action needs, which is what a straight "investment strategy" would be.   Rather, a parallel draw, based on continuity of the economy, is what is called for.

January 1999

Addendum, March 1999

Thanks for posting the information on the Tobin Tax, which you thought was similar to my suggested tithe on stock transactions.

From my reading of it I think I had put a slightly different twist in the proposal I made.  His is a tax on the unit amount.  "A tax rate of one-tenth of one percent on the $21 trillion of transactions reported in he Canadian Depository of Securities for 1995 would have produce about $21 billion,"  was what you quoted.

The 'tithe' I suggested was not on the monetary units, but on the transaction events.  And not on 'sales', but on
ownership transfers.  I know that sounds like the same thing, but it's not.  The markets I had in mind are the stock exchanges, not the commodities bourses.  This is because stock-ownership doesn't get "used-up" or similarly degraded.  Once established, it tends to stay constant, as long as some "potential. value" is maintained.

The modern stock exchanges have moved significantly away from "intrinsic value" concerns to "price fluctuation"
concerns.  That's why the old-liner talk of "price to earnings" ratio is somewhat bogus.  There is anxiety that it used to be 7 to 1,   then moved to an acceptable 15 to one, then it pressed 27 to one, now some run-away stocks are 'technically overpriced' at 40 and up to 70 to 1.

That's because with day-trading and short-term price fluctuations driving the markets, the stock prices are no longer fixed to the revenue generating performance of companies.  No one is in it for the traditional "dividends" anymore, only for the price movements.  And they can be anywhere.

And companies love it because it's a crap-shoot and the higher the share prices the better the borrowing capacity irregardless of company performance ... except as they agree with or disagree with "analysts' predictions".  You can read everyday where an analyst will predict negative earnings for a company, and that's ok because if the stock still comes in negative but 'out-performs" the negativity  (loses -25c per share instead of predicted -30c, eg)
the company performed great and the investors flock to buy more.

It's image and relativity.  So the key is not on the cash transacted, but on the number of shares being exchanged.  The 'tithe' comes from confidence in the overall market and unit-ownership being handed around constantly.  The more unit-ownerships being conveyed, the more is siphoned off by the tithe.  And without doing detriment to the markets or the profit takers.

I can envision drastic changes in monetary units (devaluations, etc) but with the tendencies to stock-splits, spin-off companies, new companies begun, ISO's, etc., the amount of traded-shares holds and even increases.

The tithe is on "that-the-markets-continue-to-operate", not on happenstantial monetary value assignments.

March 3, 1999

                  

THE INTEGRITY PAPERS 
          (LINKS TO PRINCIPLE CEPTUAL READINGS -  Discussions /  Mathematics)
GENRE WORKS     (BY OTHER WRITERS)
POETICS
MINDWAYS     (LINKS TO GLOBAL THINKERS via URLs)
    

 

| What's New |