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Old Age Revolving Pensions: A Proposed National Plan "Youth for Work Age for Leisure"
Foreword by the Editor THE author of the plan for combining liberal retirement compensation for the aged with national financial recovery and permanent prosperity as described in the subsequent pages is a physician who has been employed by the city of Long Beach, California, for the past two years, through its health department, in caring for the indigent sick. A large percentage of his patients were old folks whose life savings have been swept away by the financial collapse of institutions in which their savings were invested. With a suddenness that bewildered them these folks found themselves not only helpless but a burden to their financially embarrassed relatives. That was the last straw. To feel that they were not only helpless and useless but also in the way caused a rapid decline in their health and spirits and an actual, ardent wish for death as their only hope of relief. This pathetic collapse of their morale with the hopeless apathy it produced in them made their care a double burden upon their anxious relatives who were impelled to stretch their already meager finances in an effort to provide little luxuries and means of amusement for their beloved elders. Many of the old folks went into a rapid decline and died, the sorrow for their loss and the added obligations of the funeral expenses but adding to the desperate situation faced by their sons and daughters. Daily association with affliction, grim want and hopeless sorrow obsessed this physician with a consuming desire to provide a cure for the national folly of permitting blighting, destructive want in a land of superabundance. He believes that he has found the cure. He believes with President Roosevelt that poverty and its useless horrors can be abolished. He believes that our nation with its vast creative power needs but one important principle to be established through legislation to banish poverty and its attendant evils forever. This cure, or plan, is described in the following pages. Whether you agree with him or not, you will find intensely interesting food for thought in their perusal.
What the Old Age Revolving Pension Will Do It will put about two billions of dollars more in circulation than has ever circulated before by creating important buying centers of poor communities that have never had buying power, thus insuring brisk trade in every section of the country. The old folks are to be found everywhere.
ANALYSIS OF PLAN
RETIREMENT AT AGE OF SIXTY Insurance statistics show that only 8% of people reaching that age have achieved financial success to such a degree that they may live comfortably thereafter without depending upon further earnings. Eighty-five percent of the 92% of all people sixty years of age and over are still employed or are endeavoring in some manner to earn all or a part of their livelihood and the remainder are dependent upon public or private charity for their keep. Those of the 85% who are still earning are capable of producing only enough to partially pay for their living. A very small percentage actually earn enough for their total needs and but very few earn any surplus for their declining years. Approximately 8,000,000 people will be eligible to apply for the pension. Economists estimate that each person spending $200.00 per month creates a job for one additional worker. The retirement of all citizens of 60 years and over from all productive industry and gainful occupation, will thereby create jobs for 8,000,000 workers which will solve our national labor problem.
RETIREMENT ON A MONTHLY PENSION OF $200 The spending of $200 per month is for a constructive purpose. First, to place an adequate amount of buying power in the hands of these citizens which will permit them to satisfy their wants that have been so restricted for the past four years. Second, to create such a demand for new goods of all description that all manufacturing plants in the country will be called upon to start their wheels of production at full speed and provide jobs for all workers. This money made suddenly available to the channels of trade will immediately start a tremendous flood of buying, since the country has been on short commodity rations for the past four years, and since all sections of the country will be affected alike (the old are everywhere) and the poorest sections will at once become important buying centers. All factories and avenues of production may be expected to start producing at full capacity and all workers called into activity at high wages, since there will be infinitely more jobs available and many less workers to fill the jobs, the old folks having retired from competition for places as producers.
HOW WILL THIS MONEY BE SPENT It will go into the regular channels of trade for food, clothing, homes, rent, furniture, automobiles all manner and description of things dear to the human heart. It will go for travel, the pleasure of riding hobbies, theatre tickets, professional and servant employment and the thousand and one things which modern man demands.
HOW THIS WILL EFFECT THE OWNERS OF PROPERTY OR BUSINESS Those of 60 years and over owning income property, whose income is greater than the pension, would not need or possibly care to apply for this pension, as it is not designed to be compulsory. Those whose income is less than the pension, undoubtedly would dispose of their interests in income investment to younger people and receive the pension for their declining years. Thus performing the two-fold function that the plan provides, that of relieving industry of their productiveness and increasing industry through their consumption of goods and farm products. Establishment of homes by those now living with relatives or in institutions, either through ownership or rental, or the holding of homes, now occupied, are encouraged under this plan. Each new home established simply means greater consumption of goods and use of labor. This plan will effect a marked reduction in the tax burden which they are now compelled to carry and make more secure the profits that should accrue from business and property investment, since it will be less expensive to collect and spend two billions of money monthly than it is to maintain the monthly present-day costs of organized charity in its multiple forms, plus much of the cost of crime and disease due to overcrowding and undernourishment. It will add immensely to the volume of business done and thereby make possible profits in greater amount without increasing the cost of goods.
PENSIONERS TO RETIRE WITHOUT FURTHER GAIN FROM LABOR OR PROFESSION This is an important feature of the plan since the idea is to create jobs for the young and able, eliminating competition for such jobs and positions on the part of elderly people. Consumption of the products of farm and factory is the vital problem now facing our nation. The success of this plan is based entirely on the creation of jobs of production and by retiring all those pensioned, with adequate spending power, that they may consume for all their need in comforts, necessities and pleasure.
RECORDS FREE FROM CRIME This clause is designed to have a strong effect in restraining the young and impatient from taking the short cut of criminal activity to obtain money. They will hesitate to jeopardize their future welfare for the sake of getting money now by criminal activities. The desire to honestly earn is uppermost in the minds of American people. The records of our law enforcement departments show that crime is largely the result of lack of opportunity to provide necessities of life through the sale of labor. Provide these opportunities for our younger generations and the crime problem will be greatly lessened.
SAVING FOR OLD AGE We have been taught in the past that saving was essential in planning for security in old age. But recent experience has taught us that no one has yet been able to devise a sure method of saving. Statistical records show that ninety-two percent of all people reaching the age of sixty-five have, in spite of their best efforts, been unable to save enough to guard them from the humiliation of accepting charity in some form, either from relatives or from the state. Experience proves that no form of investment is infallible that human mind can devise which is based upon the small group or individual financing. The Townsend plan proposes that all who serve society to the best of their ability in whatever capacity shall not be denied that security in their declining years to which their services in active years have entitled them.
COSTS OF MAINTAINING THE HUGE REVOLVING FUND The unthinking see a great increase in the cost of living due to the necessity for the retailer to raise his prices to meet the government tax for maintaining the pension roll. He fails to take into consideration the fact that the elimination of poor houses, organized state and county relief agencies, public and private pension systems, community chests, etc., are now costing the country the many millions of dollars per month that the Townsend plan would eliminate. And, too, would not the cost of crime and insane asylums be greatly reduced after the public became assured of the permanency of our prosperity? Further, the tremendous increase in the volume of retail business which this huge revolving fund would insure makes certain that bigger profits would be possible to the retailer through his old rates than ever before and make unnecessary the advance in prices on any articles except those classed as luxuries. Estimated from the sources available a tax of 10% will be ample to raise this fund and the tax can be materially lowered as the volume of trade increases. Competition will still continue to operate and the profit hog will still find competitors who will hold him to a fair price rate. It is the logical foundation for our worthy President's NRA-National Recovery Act. No one will object to paying the slight advance in price for commodities for the purpose of re-establishing prosperity and, in so doing, making it possible for the elderly people to retire and live comfortably the remainder of their days, since everyone in making his purchases will be providing for his own security when he reaches the age of sixty.
SALES TAX TO BE USED EXCLUSIVELY FOR THE PENSIONS It is the intent of the plan to apply the sales tax solely to the one purpose of maintaining the pensions roll until such time as the public becomes fully assured of the beneficent and fair system of taxation involved in a universal retail tax. Here is the only fair system of taxation for all that can be devised. Every individual who enjoys the benefits of the numerous social agencies maintained for his benefit, such as schools, police protection, sanitation, public health supervision and the thousand and one functions of government, should be compelled to carry his share of the costs just in proportion to his ability to do so; that is, in proportion to his ability to spend money. This compels the child to become a taxpayer at an early age and accustoms him to the idea that he must do his share throughout his life.
NO CHANGE IN FORM OF GOVERNMENT This plan of Old Age Revolving Pensions interferes in no way with our present form of government, profit system of business or change of specie in our economic setup. It is a simple American plan dedicated to the cause of prosperity and the abolition of poverty. It retains the rights of freedom of speech and of press and of religious belief and insures us the right to perpetuate and make glorious the liberty we so cherish and enjoy.
THE MEANING OF SECURITY TO HUMANITY Here lies the true value in the Townsend Plan. Humanity will be forever relieved from the fear of destitution and want. The seeming need for sharp practices and greedy accumulation will disappear. Benevolence and kindly consideration for others will displace suspicion and avarice, brotherly love and tolerance will blossom into full flower and the genial sun of human happiness will dissipate the dark clouds of distrust and gloom and despair.
A Permanent National Cure for Depression WE RECOGNIZE the fact that the inventive genius of the world, and especially of the United States, has, through the perfection of laborsaving machines, created a condition in society which has resulted in a huge surplus of producers as well as a surplus of products. There is a constant standing army of unemployed. Even in the boom days of 1929 there was a large number of them and their ranks have been steadily increased until today there are fifteen millions of them with their families who are without jobs. They can never be put to work again unless they are willing to accept the short day and the minimum wage. Their labor will be too expensive. Machines will do the work of all of them in infinitely less time and at less cost. It will be the plan of organized society as constituted today to shunt this army of jobless aside on some sort of subsistence dole and do the work of the world with efficient and tireless machines. Mind, I say society as constituted today. We of this community say that this must be corrected. Are we a Nation of morons or imbeciles that we can solve the problems of production to a point where we have more products than we can consume and yet be eternally faced with the sight of an ever increasing number of citizens suffering from a lack of those same products to a point where they become mere human clods without ambition, content to wear the livery of serfs and eat the bread of grudging charity? This condition prevails today and nothing in the way of half-time employment, minimum wage plans or price fixing will alter the frightful state of affairs. It will grow steadily worse so long as we adhere to our present system-less lack of control of our monetary circulation. Money circulates under the present system or it does not circulate in accord with whims or fears or emotions of a few men or institutions that control the major portion of the money of the land. We say that one of the chief functions of government should be the exercise of its power to insure a steady and sufficient flow of money through the channels of trade and commerce adequate to keep that trade at an even tempo free from fear of panic or boom. We say that our government must assume this function and adopt a system whereby money shall flow in a constant volume into the coffers of the U. S. Treasury and immediately start on a return flow back into the avenue of commerce whence it came. The banking system of our country cannot do this. Money can flow into the Treasury by the taxation route but from there the stream can only reach the banks. There it stagnates. It cannot get back among the people where it is needed unless they have security to offer for it. This, when times are hard and the need for money greatest, the people cannot give and, as a consequence, business dies and the people have to accept charity or starve. By what plan shall the government assume its rightful task of keeping the money of the Nation in circulation? The Old Age Revolving Pension Plan. Recognize the fact that we can spare the seven or eight millions of people over the age of sixty from the ranks of the producers and retire them with badges of honor and pensions of a size sufficient to keep them in affluence the rest of their days. These pensions should not be paltry. They should be large enough to make the recipient an envied individual and the aggregate of all the pensions great enough at all times to insure an abundant supply of money for all commercial needs as the pensioners spend it. Let all citizens who become sixty years of age, and desire to retire, receive the pension upon two conditions: That they give proof of never having been criminals and that they solemnly promise to spend the entire amount of the pension during the current month in which it is received. Also that they retire from all productive or gainful occupation or labor. We shall request the government to assume a monopoly of the sales tax plan of collecting revenue for the pensions. This tax should be levied evenly and fairly upon all merchandise and commodities and be paid at a specific rate upon gross sales at the end of each month. A graduated "income" tax must be levied fairly so as not to discourage industry. And "inheritance" taxes must be increased. If these three forms of taxation are sensibly administered, real estate taxes can be greatly lowered. Under the sales tax plan of collecting government revenues, all classes of the population pay in proportion to their financial ability and none receive the benefits of government without assuming his share of the burden. A sales tax levied for the express purpose of paying pensions to the aged will meet with universal approval. Its beneficent purpose will be recognized by all; its two fold function (that of doing justice to those who have done a full life's work, and that of keeping an abundance of money circulating at all times) will be recognized and acclaimed by all. A rate of 10 per cent should be sufficient, if levied on all sales, to meet the pension roll. The pension system will relieve society of a tremendous burden of taxation now made necessary by the maintenance of poor farms, community chests and other charitable institutions. By keeping a healthy business condition throughout the Nation, it will remove to a large extent the incentive to crime and through lowering our prison population, reduce another huge taxation outlay. No doubt it will also reduce the number of unfortunates confined in our insane asylums. Pensions for the aged of sufficient size to assure a high standard of living will make the latter end of life a delightful golden autumn instead of the bleak and fearful winter which it represents for so many. Pensions for the aged will remove eight or ten millions of pensioners from the fields of productive effort and permit of the paying of high wages to younger workers. Prices will be stabilized at a level high enough to insure a fair profit to the producers at all times when the steady flow of money is assured from taxpayer to the government and from the government to the pensioners and thence to the channels of trade. Justice can be assured to all through this system and the injustice of permitting the wealth of the Nation to accumulate in the hands of a few will be eliminated. If you believe, as we do, that buying power can be restored to the people who are now utterly without it and that the wheels of industry can be started throughout the entire Nation by the adoption of this system, join us in demanding its adoption.
Prosperity for All: By DR. F. E. TOWNSEND THERE are ten million three hundred thousand odd persons in the U. S. above the age of sixty years according to the last census. They are quite uniformly proportioned throughout the population, this proportion, naturally, being greatest in the older settled sections where population is densest. Two billions of dollars spent monthly in all sections of the country by these old folks would give the entire population of the United States an additional $14 per capita in spending ability each month. Enough to raise the standard of living very materially above the present low level but quite within the nation's ability to provide. The constantly growing use of power by civilized man (largely electric) is increasing his power to produce the things man must use at an ever decreasing cost. Hence, an ever decreasing number of workers is required in production and an ever increasing number find themselves out of employment. If civilization is to be a blessing instead of a curse a sensible and just provision for their retirement must be devised. The return to manufacturers in profits tends to increase as power displaces men (since machines are cheaper than men) only up to the point where buying power begins to diminish among the people through lack of paid jobs, thus decreasing market demands. Hence, manufacturers too begin to see the necessity of keeping up the buying power of the people by some such plan as the Old Age Revolving Pensions. Poverty, once considered a natural curse which the human race was doomed to endure, can and will be abolished in the United States within the next five years never to return. Our country will show the way to other nations and poverty will be driven from the earth. No other construction can be given to the fact that man's ability to produce faster than he can consume is definitely established. Poverty banished, the incentive to criminal activity will disappear and national, civic and individual standards of fairness and decency will become the natural order of the day. Prosperity firmly established in America by this simple plan, the peoples of other countries will demand like opportunity and consideration from their governments and similar legislation may be expected to follow. When all civilized people are universally well off and contented there will be an end to warfare. Prosperous and contented people do not go to war.
What the Old Age Revolving Pension Will Do It will insure the continuance of the profit system of doing business, that throughout the ages has been the mainspring of ingenuity and progress. Last but not least, it will start the Golden Age of life for all who reach the age of sixty, making possible for all leisure to devote ourselves to doing the things we have always wanted to do.
ANSWERING THE CRITICS That our Old Age Revolving Pensions Plan is absurd; that it will break the nation to pay out continuously about one billion six hundred million dollars per month. Yet they loudly applaud the Administration for borrowing ten billion dollars and tossing it out in huge scoopfuls labeled with the various combinations of the alphabet without making any provision for repayment other than that of the same old taxation system already breaking the backs of the taxpayers. We show how this Old Age Revolving Pension Fund can be obtained from the public, painlessly, each month, put immediately into circulation and returned each month into the same communities whence it originated, insuring prosperous times by volume of circulation rather than by trying to borrow ourselves rich. They say: That to raise two billion dollars per month from the buying public by means of a universal sales tax would necessitate the raising of prices twenty-five (25) per cent or more. We reply: What of it? Isn't that just what the present Administration is trying to do? The farmers and other large groups require at least one hundred (100) per cent rise in prices before they can be considered at all prosperous. Would it not be better for us to pay five dollars ($5) for a pair of shoes in prosperous times than to pay four in times like these? That is a twenty-five (25) per cent advance. They say: That two hundred dollars ($200) payment per month to the old folks is too much; that they would not know how to spend such an enormous sum; that they would buy automobiles and slaughter the public with their careless driving; that the younger relatives would live off the old folks and refuse to work; that the young men and women would marry the old folks for a meal ticket; that general debauchery would result from the orgy of spending sure to be indulged in by these frivolous oldsters--and on and on ad nauseum. We reply: We believe implicitly in the honor and loyalty of all citizens who for 60 years or more have given their best in the perpetuation of the principles of our democratic form of Government. They will only continue this loyalty for the further progression of our country by being true to the reward that the government has provided for their old age, comfort and peace of mind. They will be the protectors of our government and by their knowledge and power of franchise will break up the coercion of political machines whose object is excessive government expense for personal profit. We have no fear for the future of the young American. The finest educational institutions on earth turning out the finest men and women on earth, we believe, will continue to lead this nation to higher aims and greater achievements for a finer and better social existence. Give them the opportunity. Guide them on their way, and there will be discovered new vitality, new energy with progress and prosperity never attained by any nation. There is no other true answer. They say: It is not fair to the taxpayers to provide all these old people, many of whom have never been able to earn even fifty dollars ($50) per month, with such a sum as two hundred dollars. We reply: Class legislation in any form of discrimination is odious and un-American. We say, give it to all who apply and qualify without discrimination. Discrimination is wrong and un-democratic. That is just what we are trying to eradicate from our social system. Old folks who have never been able to hold down more than a fifty dollar per month job could now be promoted to the important job of spending two hundred dollars ($200) per month all the rest of their days for the good of the general public, thereby tremendously enhancing their importance and value to society instead of being degraded to the status of worn-out shoes and kicked aside as of no account. They say: That to ask these old folks to assume the great task of spending two hundred dollars ($200) per month would entail a burdensome task upon them and rush them into early graves with worry. We reply: Go to the old folks and find out if your apprehensions are justified. Ask them which they would prefer to do, try to spend two hundred dollars per month, or go to the poorhouse--live upon relatives--beg the rest of their days. We say it is quite possible that the old folks would manifest the wit to hire help in spending if they needed to do so. We believe that all, except those who raise this objection, would be able to exhibit such wit. |