Let’s Take the Dow to 30,000


The Reagan Boom is over. The years 1982 through 2007 saw the greatest period of wealth creation in any 25-year period in this or for that matter any nation’s history.  Now let’s take what we learned during that period and multiply it so we increase the next 25 years of wealth creation 20 fold.  It can be done with a simple change in funding entitlements.

So I don’t loose you too early in this article please look at the following table.  Today Glenn Beck had a gentleman on the show from Galveston County, Texas who was responsible for creating the Galveston County Retirement Plan.  You see, Galveston County opted out of Social Security before Congress shut down that loophole in the 80’s.  They have their own plan and the difference in monthly checks between Social Security and Galveston is startling.

As you review the chart you will notice that “startling” doesn’t begin to describe the comparison between Social Security and Galveston with the results of the Ownership Society Institute’s Rise Up America (RUA) plan. Those results are stratospheric.  


Social Security v. Galveston v. Rise Up America Plan
10/30/2009

$ Monthly Check %  RUA  Nest Egg
Annual Social Galveston  Rise Up Greater  Social Rise Up
Salary Security County America than SS Security America

$       17,000 $         683 $      1,036 $ 11,342 1661% $        -   $     1,361,000

$       26,000 $         853 $      1,500 $ 17,350 2034% $        -   $     2,082,000

$       51,000 $      1,368 $      3,103 $ 34,033 2488% $        -   $     4,084,000

$       75,000 $      1,645 $      4,540 $ 50,050 3043% $        -   $     6,006,000

Sources

Soc. Security Social Security Administration
Galveston Galveston County, Texas
Rise Up www.riseupamerica.us 

Rise Up  privatizes the 15% in Federal payroll taxes into the taxpayer's personal investment 
Rise Up based on rate of return for S&P 500 in 40 year increments since 1871.  
Nest egg computed and compounded over 40 years working life

Galveston may also include a nest egg.  It involves insurance companies   
Galveston was one of the two counties in Texas that opted out of the Social Security system before that election was repealed by Congress.


Above is the empirical proof that there is a basis for exploding the growth of America while simultaneously making the average American a millionaire – yes a millionaire in retirement. This article, however, is not about the mechanics of RUA – so those interested in that plan should click www.riseupamerica.us.

Rise Up will make the economic rewards of the Reagan revolution seem small by comparison. Had RUA been in effect for the last 40 years the value of the American stock market would exceed $400 trillion rather that the less than $20 trillion it stands at today.

The simple truth is that the American government has been ruled by mathematically-challenged politicians who took the simple route and taxed the rich to pay for their government programs and ignored the free market capitalist concept of investing.  And one has to remember that taking capital out of the market by confiscation merely retarded growth by reducing the capital available for investment and growth.  That economic disease continues today.

In Barrack Obama, Americans have the perfect foil to counter his nanny-state collectivist policies.  RUA can eliminate endemic poverty, thereby wresting the mantle of the “common good” from socialism and placing it squarely on the head of capitalism – because it is capitalism that will solve all these problems.

If you don’t believe it, review the chart above again.

This article is not meant to demean the Reagan Boom but to tell the truth about it.  Most people ascribe the boom to lowering the marginal rate of income tax from 70% to 28%.  That is not the important measure Reagan employed to create the boom.  As a tax man specializing in sheltering income for the rich, those wealthy taxpayers had been sheltering their income from taxation for 50 years. Only a zero tax bill satisfied most of them and the 28% rate was no exception.  They had been paying no taxes and had no intention of paying 28% just because the rates were lowered.

It wasn’t until 1986 when Congress beat the drum that over 100 multi-millionaires still paid no taxes that Reagan signed the bill that started the boom. In the Revenue Act of 1986, tax shelters were eliminated and anyone using certain tax shelter-type deductions was hit with 20% Alternative Minimum Tax.  That meant the ground rules had dramatically changed.

When the tax law changes, taxmen invent ways to create after-tax cash and wealth using the new statutes. They advised their clients to take that highly taxed income, put it in a corporation, sell stock in the corporation and turn that $1 of after-tax cash into $10 of value in publicly traded stock. Today realized gains in the stock market are only taxed at 15%.   It worked and the rest is history.

The 1986 law has set the stage for Rise Up America.  The way to the American Dream is through the stock market, publicly traded corporations and the explosive growth they can generate. All RUA had to do was find the capital to fund this explosive growth. It found it in the hands of the government who were consuming it rather than investing it on behalf of the taxpayers.

The $1.3 trillion in payroll taxes collected every year eclipses the $1 trillion collected in income taxes. By privatizing Social Security, Medicare and Disability those funds can be freed to invest over $100 billion a month in the stock market to create jobs and wealth for all Americans. 

Let’s face it the angry man in the street is not upset with the rewards of success – they revere those who make it.  What they want is an idea from their politicians that will elevate their fortunes and alleviate their costs of punitive taxation, paralyzing regulations and the deleterious effect of inflation. 

Rise Up America will be the answer to their prayers.  It should shoot the DOW way past 30,000 too.