American Wealth Accounts (AWAs) and American Health Accounts (AHAs).
William Nunnally
The US government (Rich men North of Richmond) have developed citizen retirement (Social Security) and citizen healthcare (Medicare and Obamacare) programs to gain control of and even destroy the lives of citizens. The present systems are structured to benefit citizens from the top income levels down and do not provide the opportunity to develop family wealth and health over generations. Subsidies, grants, set asides, regulations, and etc. that are selective for certain groups while using funds from working citizens that is distributed to lots of citizens including those that do not work. The present structure of retirement and health care is biased for certain groups, unresponsive to the individual and terribly inefficient, especially for lower income Americans.
A much better way to grow the long-term wealth and health of every citizen are American Wealth Accounts (AWAs) and American Health Accounts (AHAs). AWAs and AHAs are structured to benefit the bottom income levels up with the objective of developing long term family wealth and family health based on the work ethic and not on government decisions and political biases.
In AWAs and AHAs, the government only sets up and enforces the public structure for retirement and health care, but can not do anything to control the retirement and health care received by individual citizens. The major change is that the government pays each citizen for borrowing the current sums set aside for retirement (Social Security) and health care (Medicare). AWAs and AHAs are individually owned bank accounts, each with two sub-accounts: an eternal account and a flexible account. All present retirement(Social Security) and health care (Medicare) deductions are deposited in the respective eternal accounts of each citizen. The eternal fund account has a set maximum value, for example 1 M$, that is adjusted by congress on 1 January of each year. The eternal account funds are used to purchase special government bonds that pay several percent, say 3%, over the cost of living with the percentage updated on 1 January of each year. The interest paid on funds deposited in the eternal accounts by state and federal governments serve as retirement and health care funding. The eternal accounts funds remain in the family and are distributed to heir upon the owner’s death and payment of retirement and health care debts. After the eternal account reaches the maximum value, each citizen is own their own for additional retirement and health care savings. Thus, federal and state governments will now pay working Americans for the funds they borrow to run the government through funding AWA and AHA bonds. The bottom line: every citizen can transfer all their present social security and medicare deductions, with accumulated interest in their eternal accounts, to heirs at death which grows family wealth and health over generations.
The flexible accounts of AWAs and AHAs collect the bond interest paid and can be used as determined by the account owner. The flexible funds can be transferred to the eternal accounts or used as necessary in times of job loss, health problems, education needs or retirement funding. Also, in case the citizen needs additional capital for health expenses or emergencies the AWAs or AHAs bond interest payments can serve as a resource to fund monthly payments to cover an expense in excess of that available. Note that debts in place at the time of death would be paid over time with the external fund interest before the eternal funds are distributed to heirs.
The AWA and AHA approach has many advantages for lower income citizens. Every new citizen, born or naturalized, is granted an AWA and AHA account. The welfare of children is enhanced because parents are required to deposit some fraction of their income in each child’s set of accounts. Thus, each young citizen will have some sort of education fund at the proper time.
The AWA and AHA system also provides for social security and pension citizens to opt in via agreements to pay back previously received social security and medicare payments using the interest on their eternal accounts before their eternal accounts are distributed to heirs. The immediate question is how can the government initially fund the AWA and AHA eternal accounts of those citizens changing from social security and medicare? This change in funding is a basic debt swap in which the government would fill the AWA and AHA eternal accounts to the level defined by previous social security and medicare deductions, then borrow those funds from the AWA and AHA account to pay off the owners of existing government bonds. The total indebtedness would remain the same, but now all bond owners are US citizens rather than foreign entities.