United States of America — Libertarian PartyCandidate for President

I. The Birth Loop Idea

The Problem:

• How to eradicate poverty
• How to provide a national health care plan
• How to provide a national college plan
• How to provide a national wealth retirement plan
• How to balance our budget
• How to reduce taxes
• How to control our deficit
• How to stimulate our economy
• How to stabilize our banking system
• How to reduce the size, scope and cost of government
  

The Solution:

Develop a comprehensive series of new programs, called trickle-up economics, whose ideas and basic model structure can collectively solve virtually all of our nation’s socio-economic problems without big government involvement or higher taxes. Each program is easy to understand and can be immediately effective because they work within our existing capitalistic infrastructure model.

The Programs:

1. Birth Loop                          Breaks the poverty cycle by amassing wealth
2. +25                                        Breaks poverty cycle, jumpstarts economy, head start loans
3. Birth Loop + Healthcare    Provides universal healthcare
4. Birth Loop + education     Provides universal college or technical training 
5. Birth Loop + retirement     Breaks the poverty cycle, wealth retirement  for every American
6. B Loop + International Aid Restructure International Aid to birth loop principles
   

Rationale:

• Fills the gaps of capitalism (helps those who fall between the cracks)
• Rather than new taxes all social dollar outlays are returned to government for re-use
• Money infusion annually into our economy
• Protects capitalism and defeats socialism and accomplishes what socialism can only dream
• Transitions social programs from government and into the hands of the private sector
• Efficient integration of government and capitalism
• Every dollar outlay has a corresponding loan so our balance sheet will not run a deficit
• Must be done systematically (one generation/birth year at a time) or the numbers are too big
• Perfectly matches the Federal Reserve mandate of maximum employment, stable prices and maintaining moderate long term interest rates
• Breaks the first link in the poverty cycle of accumulating money and the second link of government dependency
• Systematically gives all Americans a hand up and a head start with seed money
• Meets the CBO deadline of 8 years to reverse economy or the national debt becomes irreversible
• Offers huge improvements in people’s lives through life changing policies
• Broad based appeal
• Provides new direction for America and the world
• Unifying- programs are blind to gender, race, family make up, wealth class or political party
• Economically and morally sound and not at the expense of good judgement

How Does It Work?

Each year the government sets up a “newborn fund” from which banks will capitalize themselves, making the annual interest payments into various social accounts for the child and ultimately eliminating the need for related government programs. We will finance our social programs by exploiting an under- utilized efficiency in our lending system, specifically, using interest payments to fund social programs through the private sector with minimum government involvement and without higher taxes.

Key elements and summary

• A newborn fund is set up for each generation of new births.
• Banks borrow from the fund repaying the principle to the government and the annual interest into each child’s various social accounts
• Related social programs and associated cost are reduced and eventually removed from government as each program is implemented 
• Simultaneous points of impact on the economy: 

• Banking system stabilized 
• Banking system converts to long term financing from less desirable short term financing
• Economy jumpstarts as these loans are distributed throughout the economy 
• Savings programs are started for each American. 

• We begin the orderly transition away from government responsibility to that of free enterprise and the private sector. 
• Balances the budget
• Reverses our budget deficit to a surplus by replacing open ended handouts with safe smart loans

A newborn “birth loop” lending fund will be set up with seed money from existing and anticipated expenditures in our Federal budget. Only our nation’s finest and safest banks can borrow from this fund. All loans from these funds will have attractive rates and terms for the banks. In most cases it is a better financing vehicle than is currently available and  banks will be attracted to use these funds for capitalization, growth, projects, corporate loans as well as our personal, auto and mortgage needs. The terms and rates are unusual and attractive because they offer both long term financing and stabilization at the reasonable and attractive rates of 3% for 25 years.

Each loan will carry a covenant that will have the banks “make the interest payment into various social accounts for each individual child” rather than back to the government.  Upon repayment of these loans the distribution will be as follows:

• At maturity the banks will repay 100% of the principle to the government as usual and the government will be repaid in full.
• Annual interest payments will not be paid to the government but rather to the various newborn funds in the name of each new American  birth citizen until their 25^th birthday
• Repayment by the banks to the government will allow for recycling of the original seed money. 
• Money repaid to the government will be reissued to the financial institutions to be re-used for the next generation of births.   

Direct Benefits:

• Eradication of poverty
• Universal Healthcare
• College/Technical education
• Wealthy retirement
• Balance the federal budget
• Reverse budget to a surplus
• Stabilizes our banking system
• Jumpstarts the economy
• Seed money continues paying Trillions indefinitely
• High GDP growth
• Expanding tax base
• Multiple points of simultaneous impact on our economy
• Avoidance of government bankruptcy

Indirect benefits: 

• Reduces income and opportunity disparity
• Unemployment falls below zero percent
• More jobs, better wages and improved benefits
• Low taxes
• A more unified country politically and socially
• A protected and robust Social Security and Medicare system for those already promised

II. Program Details:

1. Birth Loop Fund

Purpose: Generational eradication of poverty from our nation by accumulating money for every citizen 

Mechanics:

• A newborn “Birth Loop” fund is created from current and anticipated federal expenditures. 
• The fund will be in the amount of $67,000 per approximately 4,000,000 new citizens born each year
• Banks will borrow at 3% interest for 25 years, repaying the principle to the government while placing the annual interest payments of $2000 into each newborn’s personal bank account.
• Banks, rather than newborns, have complete authority over the use and repayment of the 25-year loan
• Each citizen accumulates $50,000 by their 25^th birthday to be used in any legal way
• Every 25-year-old upon receipt of monies is removed from government dependence and is not re-eligible for a minimum of one year

Benefits:

• Creates an economy as broad based as the American imagination making bubbles less likely
• Attacks poverty by accumulating money for individuals and breaks the bonds of government dependence.
• Interest payments rather than tax dollars are used for funding social and government programs 
• Our current open-ended handout system is converted to a lending model
• Every outlay has a corresponding loan to a financial institution reducing public debt
• Every outlay has a corresponding federal reduction preventing inflation
• Once the original seed money is repaid and then reissued or reused for the next generation of births the dollar will be strengthened

1. + 25 Fund

Purpose: Breaks the poverty cycle, jumpstarts economy, and gives an individual a head start loans for life

Mechanics:

• Government makes a loan to each 25 year upon their birthday for $25,000
• Terms are zero percent interest with a 25 year payback of only $83/month
• Payback is obligatory 
• Every 25 year old upon receipt of monies is removed from government dependence and is not re-eligible for a minimum of one year

1. Birth Loop + Healthcare Fund

Purpose: Provide healthcare for every American

Mechanics: 

• The $2000 annual interest payment into the child’s account will be used to purchase a private healthcare plan each year
• All new births will be insured through Birth Loop + Healthcare
• Affordable Care Act will eventually fade away as each generation passes away and all new births enter Birth Loop + Healthcare

1. Birth Loop + Education” Fund

Purpose: Provides universal college or technical training for every American

Mechanics: 

• Each citizen amasses $36,000 by their 18^th birthday to be used for college tuition

1. Birth Loop + Retirement” Fund:

Purpose: Breaks the poverty cycle, provides wealth for retirement for every American

Mechanics:

• Funds will be handled by qualifying money managers who receive a 1% management fee
• Citizen’s account receives either: a guaranteed rate of return (5%) or the historical 50 year average rate of return (7%) compounded annually for 65 years.
• Citizen becomes eligible for the money in the account at the age of 65
• Citizen is responsible at that time for doubling the repayment of the initial $42,000 to the government.
• Value of the account will be $1,001,275 vs. $3,413,460 respectively 5% vs. 7%
• Citizen becomes responsible for the continuation of their own private healthcare policy after age 65 out of these dollars; otherwise these dollars are free and clear of repayment or taxes 
• Excess funds distributed at inheritance without estate tax to eradicate poverty  

Benefits:

• Replaces Social Security and Medicare

1. Birth Loop + International Aid Funds:

• Our international aid programs should be restructured using Birth Loop principles and programs for wealth creation, health care and the rebuilding of infrastructure 
• Money is recycled, reducing the need for additional funds over time
• Newborn funds are created for impoverished nations through either:

• Their own central government if a banking system is available
• International monetary agencies replacing our current international aid programs
• Any economically developed nation in an “adopt a country” approach

• Repurpose existing dollars into seed money and return the rest 
• Our current open ended handout system is converted to a lending model
• Ushers in a new era of world prosperity

III. Source of Seed Money 

There are trillions of dollars to fund these programs which over time will become self-perpetuating, without the need of tax dollars. Every current program converted to this model reduces the federal budget by a like amount. A two trillion-dollar conversion indicates a 50% reduction in a four trillion-dollar federal budget, turning our debt to a surplus.

Some areas where seed money can be found:

• Repurpose existing expenditures in the federal budget –dollar for dollar
• $100 Billion in savings on our national debt payments from a national credit upgrade
• Elimination of the programs replaced by Birth Loop program, such as welfare, healthcare, education, Social Security, Medicare, International Aid
• Tax revenue from high GDP growth - 4% growth taxed at 15% = $120 Billion annually
• The $300 Billion in our nation’s current annual debt interest payment which buys nothing
• $260 Billion in expired federal programs
• $70 Billion annually as all 25 year olds come off government welfare rolls

Additional economic policy suggestions:

• Interest Rate Reduction Act to reduce maximum allowable interest rates from 39.9% to 18.9%
• Social Security Finance Reform that reduces individual rates from 6.3% to 4%, with no employer matching, and lifts the $113,000 cap on taxable income 
• Balancing the Federal Budget through high GDP growth and improved national credit rating
• Implement a decreasing Flat Tax starting with a 19.5% rate to balance our current budget 

• Once balanced all new revenue to the government will be distributed in the following manner:
• 50% goes to the federal government
• 25% goes toward repayment of our national debt
• 25% goes toward taxpayer relief and a descending flat tax
• Goal one-12% flat tax
• Goal two-6% flat tax

• Repatriation of capital by attracting foreign corporations with low taxes and eligibility for birth loop loans from our banks,