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ENHANCING POOR AND MIDDLE CLASS EARNING CAPACITY WITH STOCK ACQUISITION MORTGAGE LOANS

ENHANCING POOR AND MIDDLE CLASS EARNING CAPACITY WITH STOCK ACQUISITION MORTGAGE LOANS In this article, to enhance the earning capacity of poor and middleclass people (who in recent years have suffered a substantial decline in their share of national income), we propose a new loan which facilitates acquisition of financial capital with the future earnings of financial capital acquired and we discuss some possible strengths and weaknesses of such an approach. According to our analysis, there is an undeveloped market for the broader distribution of future capital income in which the price (cost) paid for acquisition of securities to realize such future capital income plays a crucial role. More specifically, we show that increasingly elastic demand for future capital income raises consumption (and therefore production) for the entire economy and, under certain conditions, for both high and low income earners. Additionally, we describe suggestions proposed by past researchers regarding how such loans may be instituted in countries with well-functioning financial markets and monetary systems, at acquisition costs lower than average historical returns in security markets. JEL codes: A1; A2; B2; B4; B26; D24; D33; D53; D63; E02; E25; E44; E58; E64; G18; I32; O16; O4; Z13 Keywords: banking; investment; finance; income distribution; wealth distribution; capital acquisition; growth; development; macroeconomics; monetary economics http://www.deepdyve.com/assets/images/DeepDyve-Logo-lg.png Economics, Management, and Financial Markets Addleton Academic Publishers

ENHANCING POOR AND MIDDLE CLASS EARNING CAPACITY WITH STOCK ACQUISITION MORTGAGE LOANS

ROBERT ASHFORD
Economics, Management, and Financial Markets , Volume 11 (2): 16 – Jan 1, 2016
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Publisher
Addleton Academic Publishers
Copyright
© 2009 Addleton Academic Publishers
ISSN
1842-3191
eISSN
1938-212X
Publisher site
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Abstract

In this article, to enhance the earning capacity of poor and middleclass people (who in recent years have suffered a substantial decline in their share of national income), we propose a new loan which facilitates acquisition of financial capital with the future earnings of financial capital acquired and we discuss some possible strengths and weaknesses of such an approach. According to our analysis, there is an undeveloped market for the broader distribution of future capital income in which the price (cost) paid for acquisition of securities to realize such future capital income plays a crucial role. More specifically, we show that increasingly elastic demand for future capital income raises consumption (and therefore production) for the entire economy and, under certain conditions, for both high and low income earners. Additionally, we describe suggestions proposed by past researchers regarding how such loans may be instituted in countries with well-functioning financial markets and monetary systems, at acquisition costs lower than average historical returns in security markets. JEL codes: A1; A2; B2; B4; B26; D24; D33; D53; D63; E02; E25; E44; E58; E64; G18; I32; O16; O4; Z13 Keywords: banking; investment; finance; income distribution; wealth distribution; capital acquisition; growth; development; macroeconomics; monetary economics

Journal

Economics, Management, and Financial Markets – Addleton Academic Publishers

Published: Jan 1, 2016

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