New Liberal Idea: Federal Government Would Create A Social Wealth Fund

The opinion pages of the NY Times are always a wealth of hardcore leftism, where new ideas are trotted out. We have this one by Matt Gruening, which would transform private wealth into public wealth

What if Everyone Benefitted When Stocks Soared?

The solution is simpler than it seems. There’s a tried and tested way, within the system we have now, of giving everyone a share in the investment returns now hoarded by the wealthy. It’s called a social wealth fund, a pool of investment assets in some ways like the giant index or mutual funds already popular with retirement savings accounts or pension funds, but one owned collectively by society as a whole. One that paid dividends not to the few, or even just to the shrinking middle class lucky enough to have their savings invested, but to everyone.

It may be our best chance to stop a decades-long trend of rising wealth inequality that has only accelerated since the Great Recession. According to new data released by the Federal Reserve, the collapse of the housing bubble and the ensuing financial crisis caused the net worth of virtually all families, rich and poor, to drop sharply between 2007 and 2010. But during the post-2010 economic recovery, the fortunes of the wealthiest grew rapidly while nearly everyone else’s lagged behind.

That’s weird. We were told during the Obama years that the stock market doing well was super awesome, and all thanks to Obama. Now we’re told a great stock market isn’t. Oh, and that income inequality (meaning class envy) got much, much worse during the Obama years. In fact, it’s the worst its been since they started measuring it in 1983.

Here’s how it could work. The federal government would create and run a new investment fund, and issue every adult citizen one share of ownership. The fund would gradually come to own a substantial and diverse portfolio of stocks, bonds and real estate. The investment return that the fund generates would be paid out to each citizen in the form of a universal basic dividend, and the shares would be nontransferable to preserve the institution’s egalitarian purpose.

Yes, because the federal government does a great job in using the People’s Money, taken forcibly, wisely, eh?

The net result of such a system would be to gradually transform private wealth, which is very unevenly distributed, into public wealth that every person in society owns an equal part of. If, over time, the social wealth fund came to own one-third of the country’s wealth…

In other words, this is just another idea to put all the wealth in the hands of Government, which would dole out said money like a parent giving an allowance, all while making citizens even more reliant on Government.

Where would the money come from?

Wouldn’t the enormous wealth that our increasingly productive society is generating, which now flows into just a few pockets, be a fair source? Some of the concrete ways this could happen are through the transfer of existing federal assets like land, buildings and portions of the wireless spectrum into the new fund. Other measures could include increases in taxes on capital that affect mostly the wealthy such as estate, dividend and financial transaction taxes and the creation of a new type of corporate tax that requires companies to directly issue new shares to the social wealth fund on an annual basis and during certain corporate moves such as initial public offerings, mergers and acquisitions.

So, a Robin Hood tax. Typical leftist redistribution of wealth. Another idea is for the Federal Reserve to buy stock for the fund instead of treasury bonds. One has to wonder why Leftists, who are controlled by moneyed people like George Soros, Thom Steyer, Hollywood, etc, are so invested in this whole income inequality thing. And why they’re always looking for ways to tear down successful people in a manner than would make citizens more reliant on government.

Crossed at Right Wing News.

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9 Responses to “New Liberal Idea: Federal Government Would Create A Social Wealth Fund”

  1. Jeffery says:

    So, a Robin Hood tax.

    Currently we have reverse Robin Hood taxes. Directly and indirectly EVERY policy is intended to redistribute the fruits of our labors from the working classes to the wealthy. And the solution being voted on this week and to be signed by tRump is to further cut the taxes of the wealthiest amongst us. While my family will only be rewarded with tax cuts of tens of thousands of dollars a year, tRump’s family will save $1.1 BILLION! Most other families will either get a modest cut ($70 a year) or actually pay more.

    And the debt, which is only important when a Dem is prez, will increase prompting punitive cuts in Social Security and Medicare, which the GOP has pushed for decades.

    But Con Men own the narrative. We all need to understand that the laws and policies are designed to succor the wealthy and the corporations at the expense of the working classes. No Donald, no Mitt, you did not build it all yourself. The government helped you.

    • GhostRider2001 says:

      Thanks for the laugh. I needed that. Here’s a hint for you — everyone in politics is a con artist, regardless of party, and the biggest con artists of all are the ones that hunger the most for more government control over people’s lives and money.

  2. drowningpuppies says:

    The federal government would create and run a new investment fund, and …

    They already have.

  3. Dana says:

    So, what happens when stocks lose money?

    Under the law, the Social Security Trust Fund may invest excess dollars in only one thing: United States Treasury Bills. That ain’t going to produce a whole lot of new wealth for everyone, and it’ll just get spent, the way things are done now.

    It wasn’t so long ago that President Bush proposed allowing — not requiring — people under 55 to put two percentage points of their 6.2% Social Security tax into private investments, and the left howled that the GOP was trying to destroy Social Security, the possibility of stocks losing money part of their argument.

  4. Jeffery says:

    And dana points out the obvious flaw in Groening’s plan.

    The stock market doesn’t just go up. Remember the Great Recession a decade ago? People lost billions in wealth. On the other hand the overall trend is decidedly up. Do not count on the stock markets for short term gain – it is too risky. But for steady, long term growth it’s reasonably safe.

    Better approaches for assuring the working classes make enough money to live on are many fold. Re-institute solid progressive taxation (to remove the onerous burden of state and local taxes on the working classes). Stop the patent and copyright giveaways to the wealthy. Have the fed respect employment as much as they respect inflation. Have Congress and the executive branch use fiscal policy to “fix” recessions. Construct trade deals to reward workers not just the wealthy. Support education and job training. Solve the opioid and meth crises. Universal healthcare (healthy workers are better workers, and less worry about paying for healthcare.)

    • Hoss says:

      Right after you insist that everyone graduate high school (no GEDs) – mandatory attendance, not have kids until they are able to raise them without outside assistance (someone else picking up the tab), make sure everyone – everyone – is working 40 hours a week for the success of the collective, and that’s just to start. You lefties always want to complain about inequality, but you’re never honest enough to recognize the inequality of effort in this country, and people are tired of subsidizing other folk’s laziness and/or piss-poor decision-making.

      • Jeffery says:

        Hoss,

        Do you have experience in the upper echelons of corporate America? CEOs and VPs DO NOT work harder than clerks, first grade teachers, cops and mechanics, although we do make lots more money. We all underestimate the role of luck of and good fortune in our outcomes. Hard work is only part of it.

  5. GhostRider2001 says:

    Don’t we already have this with Social Security, except that the money is only invested in the debt of the Federal Government? Why would anyone trust government (the same folks who are now making headlines because of their bad behavior) with any more money than they have today. Actually they deserve less money than they get because they waste at least 30%, if not more.

  6. Cms says:

    Who would vote these shares at stockholders meetings?

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