Capitalistic Renaissance     12: The Solution

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Here is the simple economic solution to debt: tie the labor units automatically into the value creation process caused by new public companies. The new financial tool for consumers, wage earners or labor units is the “free customer stock option.”

Let’s understand and contrast what is being said here. Currently consumers are tied to free credit where the repayment of the exponential debt taken on by governments and consumers is via limited or fixed cash wages. The continued use of free credit where the consumers are really purchasing debt is flawed and unnecessary.

We now know that when 46% of the ownership of new public companies is given free to consumers in exchange for their cash purchases, the value of their stock on the first trading day is always 3, 5, 11, 20 or over 40 times more than their cash purchases. This automatic grant of equity value to consumers is a strong incentive for them to spend their hard-earned cash, hence the repeated claims of “guaranteed sales” or “guaranteed customers” in this article. It is a reasonably sober and probable claim to make.

The solution calls for an exact number of customers to be given 46% ownership in an exact number of new public companies in exchange for their guaranteed cash purchases. This enables consumers to capture and participate in the “equity value” that they create.

From the consumer’s point of view, the solution replaces credit with equity. From a macro-economic point of view, the solution brings an economically healthy balance between credit and equity.

Go to Section 13; A Value Choice

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