W.E.S. Rose

"Did you hear about the rose that grew from a crack in the concrete? Proving nature's law wrong, it learned to walk without having feet. Funny, it seems to be keeping it's dreams; it learned to breathe fresh air. Long live the rose that grew from concrete when no one else even cared. "

- Tupac Shakur

Thinking about ways to reach the ones that need it most, and provide with resources has led me to other concepts, policies, and programs. The issue that I ran into when it comes to benefiting seniors and the working poor alike, any "extra" money they get the less assistance and more taxes the government requires. Reading journal article, Johnson & Sherraden, 1992. Asset-Based Social Welfare Policy: Homeownership for the Poor, provided policy solutions. Asset-based Welfare (ABW) is a policy approach that claims the individual ownership of assets is important for individual welfare. The term ‘asset’ signifies all kinds of resources that help generate revenue as well as receivables. Assets are resources which often help to reduce expenses and enhance profitability. So if it helps reduce expenses, we should be loading the working poor with as many assets as possible. The main problem with living paycheck-to-paycheck is having too much month at the end of your money, so if assets help reduce expenses we need programs that help people acquire, keep, grow, and multiply assets. Examples of asset:

🔸Cash and cash equivalents

🔸Accounts Receivable

🔸Inventory

🔸Investments

🔸PPE (Property, Plant, and Equipment)

🔸Vehicles

🔸Furniture

🔸Patents (intangible asset)

Assets provide important welfare effects some of these effects being: asset stabilized households by serving as a cushion against income shocks; assets stimulate development of other assets, including human capital; assets enable specialization and risk-taking; assets increase personal efficiency and social influence; assets increase political participation and community involvement; and assets enhance the welfare of offsprings. Our current welfare system is solely based on household income. Income is assumed to be directly related to a level of consumption and it is seldom questioned whether a level of household income and consumption is an inadequate definition of welfare of households. The underlying assumption of this policy is that poverty and hardship are defined by insufficient consumption, and the solution, one way or another, is to make the consumption more sufficient. This income-based definition of welfare is misguided: the welfare of households is determined not only by income, but also by the accumulation of assets. I grew up on government assistance I can tell you first hand this is true. People not wanting to risk their housing, food, or cash aid, are forced to either comply (further impoverished) or lie and get in extra income. On top of that, they send people to make sure you're living the way you say you're living.

Government gifts the gifted. Government forgoes $100 billion (for good reason) in tax revenue, which mainly targets and benefits the wealthy home and property owners, equating to benefits and deductions that the poor do not have access to. According to the journal, incomes support consumption, assets change psychological outlooks, behavioral effort, and social interaction. The key policy instrument would be long-term accounts that accumulate savings for particular purposes and life goals. Sherraden suggests Individual Development Accounts. Turnkey III offers great qualities to the cause, the purpose of Turnkey III was to make homeowners out of very low income people who were eligible for public housing and placed upkeep responsibility on them, as well. Section 236 subsidized the construction and operation of housing by cooperatives, but did not allow people to sell their share for a profit. HOPE programs link homeownership with job training, economic development, and supportive social services in an attempt to assist low-income people not only in acquiring homes but also in retaining and maintaining them.

The way that asset tests are designed, even one additional dollar in income could be enough to disqualify a family from receiving benefits worth thousands. But with many other programs, TANF (welfare), SNAP (food stamps) and Medicaid, to name a few, beneficiaries face a stark choice: continually spend down their savings or become suddenly ineligible. The problem from a public policy standpoint is that asset-testing also creates a powerful incentive for families not to save money. Public assistance programs are designed to provide benefits only to people with too few resources to avoid destitution. Destitution means poverty so extreme that one lacks the means to provide for oneself. Why would we wait for people to be drowning before we place a life jacket on them? Today’s asset limits require families to live in a state of perpetual economic instability, without the savings they need to cope with unexpected medical costs or periods of unemployment. They deny individuals the opportunity to become self-sufficient through investments in higher education or job training. I'm in agreement with the authors of the journal article, the thinking needs to change with how we approach the situation. Coronavirus has only thrushed this issue into the spotlight, with unemployment spiking because of the pandemic, these asset restrictions will prevent many newly unemployed people from obtaining the relief these benefits programs provide. Asset tests trap seniors, disabled people, and their families, in particular, in precarious economic conditions and contributing to the disproportionately high poverty and unemployment rates they face. These limits have not been updated in 40 years, thus pushing beneficiaries deeper into poverty every year.

How our social welfare programs should run. If it were to start tomorrow, all persons/ families (citizens) at or below the poverty line would automatically be eligible, with a mandate to expand services, network, and capacity every 5 years. I think housing should be the first asset provided to program participants; housing is normally the bulk of household expenses, removing the uncertainty around housing will be the foundation. Moreover, homeowner equity is an historically proven method of exiting poverty for immigrant groups, which suggests asset-accumulation as a strategy for combating persistent poverty. An adaptation of previously mentioned programs (Turnkey III, section 236, and HOPE) where a government agency buys property rehab them, sells it to a cooperative management group, who then sells the individual units. I like Turnkey's requirement of the tenant upkeeping the unit, and creating a homeowner's reserve. Adult individuals would get cash equivalents as a monthly stipend for living expenses. Cash would be ideal, but there would be the usual concerns presented regarding welfare: who provides (or does not provide) the income and how much it should be? Then the bureaucrats discuss what income is, how much income is required to live above the poverty level, how to distribute or redistribute income, and whether to what extent income transfers affect work behavior. Which is why if direct cash transfers pose an issue a electronic card can easily be used instead. Individuals should be set up with bank accounts (whether branch or online), where funds can be transferred.

The individual would be given something like a 401k plan or Woodrow Bailout, meaning each person would become the beneficiary of an investment account used for retirement or big asset purchases (i.e. home or education). Each able individual would also get or have access to affordable and reliable transportation, this can be simply accomplished with tax incentives. For a more structured approach, I would access the market of vehicles local and federal governments have (i.e. auctions, repos, and asset forfeitures). We can also incentivize the rebuilding, refurbishing, and restoration of older vehicles, which would reduce that form of waste in landfills. The simplest explanation of accounts receivable is credit. So the individual would need access to a line of credit (access to capital), the sensible thing would be to have enough credit to cover 3 months of expenses. Credit is abundant, there shouldn't be issues on providing it for the program participants, with low rates and beneficial terms. At the change of every administration there is a huge transition in furniture, equipment, and appliances; creating an inventory of items, all those usable items should be sold, rented, or donated to participants in the program, and used to furnish the housing units. That can be expanded to other areas as well, incentivizing restoration of upholstery and recycling/ repurposing furniture. For the final 2 asset classes (PPE and patents) would be saved for last, and improbable at that point, assistance is minimum, and self-sustainability is pretty certain.

To pay for it would require a combination of grants, donations, SIBs, and green bonds, along with public and private sector investment. Cities and localities can get financing with local community banks and credit unions for the building, and the state and fed will have to approve building permits for these types of projects. State helps subsidize the housing cost, with large banks and investment companies taking the lead. Tax revenue will generate from homebuilding, placements, and fulfillment, cycling throughout economies in cities across the country. Incentivizing the restoration of old cars could act as another way local economies are stimulated, people will either sell (or donate) their furniture, appliance, or vehicle and buy a new one or spend that (and more) on public transportation or ride-hailing; not to mention, the wages paid for restoration labour. Consequently, this can also benefit high schools, trade schools, community colleges, and universities; those institutions can partner with business and provide students and programs with furniture, appliances, and vehicles to restore, refurbish, and restore. Best case scenario, this will likely increase competition, reduce waste, and reduce inflation.

I also believe the tools and foundation is already there in the private market, platforms exist where a vehicle not only provides transportation but also the single qualifier for income in the form of: ride-hailing, food/ grocery delivery, and mail/ package carrying. That too, is taxable income (if applicable) and a form of employment. The objective is to have people be productive members of society, not overworked and barely making it. I wonder why charities such as Goodwill and the like haven't been incentivized and encouraged to establish, promote, and scale "rehab factories" (for the lack of a better word). All assets mentioned have the possibility to earn income for their owner, equipping individuals with value producing assets will accelerate poverty reduction and fulfill the beneficial effects assets have on welfare. Benefits recipients should not be forced to compromise their long-term economic security by depleting their existing savings in order to attain the immediate and life-sustaining relief these benefits programs provide.

Load my Elephant up with what I want it to consume with ease. Attempting to develop a UBI system that works and can be scaled can be the stepping stone to fully accomplish and implement ABW. In this proposed system, two different things need to be established: the systems of logistics and what I refer to as the anchor. Logistics, also being accessibility and distribution, encompassing how people apply/ qualify and how the funds are made available to the applicant. The anchor is the most important part, it's how you pay the funds. For a program like this the anchor must be a collaboration of and from: investments, donations, charity, & government assistance. So I assembled a model portfolio I call the W.E.S. Rose Portfolio to serve as the anchor. The anchor must be resilience, self-sustaining, and provide income (dividends). The investments must be in securities that are vital to a sector or the economy as a whole. As of now, the portfolio have 8 holdings hovering around a CMV of $5300 with an average dividend rate 2.92%. In this scenario, the UBI distributions will have to come from the dividend income, and be divided and distributed to program participants. The most effective way to do it would be for the distributions to start off quarterly, then when able, increase to monthly. To also encourage self-sustainability, participants should "buy in" and take on a position of shareholder / stakeholder.

“But he who dares not grasp the thorn, should never crave the rose.”

- Anne Bronte

In the proposed program, the buy-in will be represented by a ticket; that ticket price will be determined by the mimicked current price of the portfolio, which represents the sum of each individual share held. The program will come with financial planning and a coach/ advisor, giving someone money isn't the end-all-be-all, they need to learn better habits and gain a better mindset to properly take advantage of the situation. Unlike the example I used previously, the Program Managers will be around to assist reasonably. Not assist to maintain, but assist to expand, increase, and multiply. The goal is to make financial assurance: affordable, easily acquired, and flexible. ABW can be used in assistance to acquire the basic asset combination for an individual to become self-sustaining, self-sufficient, and self-retired. The overall program can be used as an Asset-based Welfare Assistance Program, having the foundation placed on UBI and cultivated by financial advising and coaching. As the program run time increases, more assets are acquired, stabilized and maintained; while concurrently, adjusting and lowering taxpayer funded welfare programs. Equally important, the administratively burdensome and costly process of asset tests would be eliminated. Asset simulated development of other assets, including human capital. At the end of the day, our most important asset is people, and we cannot let this current system of capitalism squander these assets and allow so many to be subjugated into poverty.