Future Economies LLC

THE NEW ECONOMIC FRAMEWORK: Creating $30 trillion in new ROI for the US Government

 

Transparent, ROI Based, Data Driven AI

 

There is a rising new economic framework for future economies that neither requires the raising of taxes or the cutting of services to raise the quality of life of citizens.  Instead there is a rethinking of the missing ingredient in future economic development, performance based ROI, that when supplied, causes unimagined new prosperity and worldwide innovation. Reshaping economies in the post Coronavirus era requires a full understanding of the challenges we face, the assets we have, the alternative futures we can choose from, and “trust and faith in each other,” the most essential requirements.

 

There are several opportunities for generating major new revenue to governments in the post disaster economy. The greatest ROI is to eliminate a major area of poverty - youth poverty. In this fresh look at the Math of Poverty we see that the current path of thinking that divides the haves and have nots, republicans and democrats, and poor neighbors against affluent neighbors. Fans of divisiveness keep paralysis hovering. Ethnicity and religion are drawn into this unnecessary fight. Resentment, jealously, and misplaced anger over who works harder for resources and dollars is unleashing hate in a growth and development trap of haves and have nots.  The Math of Poverty is a fresh economic framework to create a prosperous, alternative economic model while happily de polarizing the attitudes and opinions of those persons under the sway of the poor vision factions. To implement this platform of economic development there are three overarching characteristics that must be included:

 

Transparency

 

Citizen support in economic development is essential to approval and implementation.  In this seminal discussion of a fresh universal economic framework that provides workable solutions to benefit overall economic prosperity we illustrate how to create economies of the future through performance based equitable economic development. Strategic incentives that are performance based with ROI software elevate increased economic return on investment to unprecedented levels. Although the key elements of a high impact strategic economic development playbook are presented here comprehensively, the turnaround impact is based upon a new short term, incentivized education to economic system, super tutoring America’s children in poverty, all 15 million, in entrepreneurship or STEAM. This Einstein Project is described in detail, how to pay for a performance based, measuring and capturing high Return on Investment (ROI) architecture, and how local and national partnership with the private sector, education and third party not for profits, fits together.

 

ROI

Projected ROI in new taxes generated nationwide is $750,000,000,000 – $1 trillion annually, estimated at $33 - $50 trillion sum total net new taxes as the workforce ages into retirement.  The value of this new revenue stream, and other new business expansion revenue streams shown in the technical manual, are how America achieves sustainable resources to pay off our outstanding debt, build infrastructure with cash, and strengthen health care, social security, and U.S. Defenses. This flexibility opens up the potential for America to further invest in new ideas that occur as technology and citizen engagement visioning demand.   

 

Data Driven AI Economic Strategies

 

Within this new  strategy is also a performance based architecture for leveraging the $2 - 4.5 trillion of new national infrastructure investment, to eliminate the extreme shortage of STEM, creative and entrepreneurial careers for youth in poverty. This “added value” policy capitalizes on US and global demand for technology, infrastructure and, human talent.  It is the most resilient economic future that produces growth, vision, equity, diversification, tax generation while super charging inventiveness, technology, small business expansions in rural and urban America. The tactical benefits of these industry strategies will insure the regeneration of communities nationwide and globally.

 

Why we can’t continue Increasing Taxes or Cutting Services

 

The inevitable result of the current fiscal approach is poor morale and polarization of political parties. There is extreme difficulty in the economic blindside of the false choices raise taxes or cut service. The polarization of the American people is based not on agreement of what needs to be done, but on how to pay for it. The Manual provides the platform and data driven algorithms demonstrating new revenue streams that make it probable that America’s challenges, can be addressed expeditiously. But first, let me say what the Manual is not about. It is not about spending arithmetic. It is based on proven economic techniques, the simple premise that cultural diversity is an economic strength, and that maintaining our economic strength in order to defend against global competition is the pathway to preserve our national integrity, prosperity and to insure happiness and peace.  If you assume that the real question is about how we meet impending crisis it is obvious that Americans must initiative a major modernization of how we invest in the future and how we measure performance and ROI.  It's up to us to choose wisely.

 

IMMINENT CHALLENGES

 

The 2020 Economy Debt and Looming fiscal challenges:  In early 2020 the USA Economy featured record low unemployment, a Dow Jones Market Place above 29,000, and the lowest minority unemployment ever. These positive outputs were achieved with lower federal taxes and regulatory compliance. Yet this promising Economy had great financial and equity challenges facing it that persist today.   Today we have 30 million new unemployed. Cities, States and the Nation are facing a horrendous drop in taxes. We are faced with existing and growing government debts that will drown our economies unless we adapt existing economic tools to pay for the future we have inherited.

 

We faced five (5) imminent financial crises before that Pandemic that we can solve for:

 

• National Debt: $22 trillion; interest $479 billion annually.

• National Infrastructure: $2 - $4.5 trillion essential modernization needed.

• Social Security Solvency. OASDI will begin paying more in benefits (Motley Fool Jan, 14, 2018).

• American Youth Poverty is 15 million kids. $1 trillion annually. Local government costs are unknown.

• Post Disaster Economic Losses. NCEI the tax cost of disasters since 1980 is $1.775 trillion

• Automation: 20 million low skill jobs to be lost between 2020 and 2030.  Oxford Economics.

 

 

As of this writing the National Debt has climbed to over $24 million. The rising challenges of creating a prosperous spread offense in the face of these looming challenges, means a strong defense and a diversification of the current American Economic Strategies.

 

The 2020 Coronavirus Pandemic challenges: The unemployment rate announced today is 14.7%, soaring from the 3.6% rate less than 2 months ago. The Global Economy is near flat lining. The close down of the Economy .resulted in trillions of dollars spent to stabilize the health care and economic system of America. The global economy is near collapse. America is absorbing calamity sized economic shocks to businesses, family disposable income and the availability and quality of public services. The current, stimulus, consisting of nearly $3 trillion is a necessary policy. None the less, those dollars must be recouped on top of the pre Coronavirus fiscal challenges. Cities, States and citizens nationwide are staggering financially.

 

What are the options for rebuilding our economy stronger, smarter, and more prepared for unexpected downturns?  The purpose of the Math of Poverty Manual is to practically suggest a new platform of economics that will solve for the financial and social problems we face. Repeating the same solutions that got us into this situation will not produce different results. The best solutions are ones that you the public conclude are transformational, practical and imaginative.

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Recommendations

 

Connecting education to the Economy is the key pillar of building a new eon economy. With an eye to successful national economic models in Singapore, Israel and other prototype education to economies strategies, we describe hands on approach to eliminate poverty and supercharge the Economy. We describe how to propel a youth wave from poverty to a generation of Einstein’s; how to capitalize on financial ROI in right sizing government using cultural diversity, and human, intellectual and financial capital.

 

Super tutoring children in Poverty in the practice of Entrepreneurship is the foundation of all industry clusters. Without a top notch understanding of the dos and don’ts, entrepreneurs without business acumen will fail to deliver. Your small businesses grow faster with the suggested platforms. This platform includes a portfolio of fast forward shark tanks, critical actions to access capital, merchant guilds options, open source technology, and on line business social media and marketing curricula at inexpensive costs.

 

Urban and Rural Regeneration with Private Partners  - vacant, underutilized or disinvested government properties is a small but important strategic mechanism for activating under performing or non-tax producing blighted areas of communities.  Examples of inducing private investment with citizen supported, tax producing partnerships are described. The templates include the introduction of art, music, affordable housing, local businesses, green space and jobs.  Redevelopment without cost benefit analysis is unsustainable. This manual identifies ROI software and financing tools.

 

Awake to Creative economies - it is a misunderstood and undervalued resource. In a study post-recession, the creative economy of one major US city grew to $4.6 billion as citizens listened to music, saw films, played games, and enjoyed digital entertainment when the economy stressed them out. The creative sector in Austin gained in $71 million in local taxes and 49,000 jobs between 2005 and 2010, the major recession. The benefit of the creative economy is that the attractiveness of the community is elevated by the conscious beauty of art, music and film as key values add.

 

Incentives software platforms should be modernized with ROI software that tell governments how much money not to give, that are completely transparent, and that generate a measurable and superior return on investment of taxes is described.  Each community that seeks to grow its existing businesses, good jobs and its tax base will see how to diversify its Economy in the unlikely event of a meltdown in any one cluster industry.

 

 Conclusion

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Global economics is a hard ball competition made easier by empowering ethnic minorities in each community as the tip of the spear for international trade.  The benefits of growing Latino, Asian, Black Chambers of Commerce and connecting those resources to science cities worldwide will produce locally headquartered multinational corporations. Look at the International Association of Science Parks and Areas of Innovation to better understand the networking opportunities of foreign immigrants and 175,000 high tech companies worldwide.

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The Solution

 

To understand the math of poverty we need to be able to create a ledger of investments and the resulting ROI. For example, if we can reduce poverty we reduce the costs of police, courts, incarceration and jails, health and human services, and affordable housing.  Those persons elevated above poverty incomes are also paying taxes, and their children are no longer in poverty.  The result of doing the math on poverty is to create a financial ROI for data-driven solutions.  This includes but is not limited to increase funding of STEM and entrepreneurship in poverty youth, a fresh look at workforce policies, and reciprocal financial performance improvements to governments subsidies.  Policies generated from a realistic review of costs and investments in subsidies related to poverty will likely precipitate new public-private partnerships to break the cycle of children in poverty in a bi-generational manner. The key economic tool available to fund comprehensive tutoring of all children in poverty for high-end STEM careers and to own companies is economic incentives. Economic incentives are commonly used to entice technology or manufacturing companies to relocate to communities to anchor their cluster industries.  An Einstein Project approach would be to look at the actual ROI produced in each community by eliminating a generation of children from poverty, and financially incentivize local companies to participate in 10-year tutoring stints with STEM stakeholders and schools.  The negotiations of how much to pay the companies to cover their costs for this initiative would be determined by the ROI to ensure the economics are cash positive for each community.  The solution is performance-based, with third-party evaluators and financial and social metrics (income, taxes, progress in school, attendance, competences.) By understanding the math of poverty and crafting a cash positive solution, each community can experience the windfall of reduced government expenditures on sustaining poverty, as well as stimulating a generation of taxpaying young Einstein’s. 

If we can research and create a data-driven, block chain approach defining the tax and private costs of poverty, and the huge monetary, social, upside (the return on investment) ROI of reducing poverty, the realization of this economic impact will drive American cities to incentivize the private sector in new economic solutions forward.

 

Poverty is the economic blindside of our current and future Economy.   It is extremely unsustainable and expensive.  For example in Austin Texas approximately 65% of the annual municipal is needed for public safety. This leads to the question, what monetary cost of that budget is attributed to courts, police, jails, counseling, for 13% of the population officially living in poverty?  Similarly, at what monetary cost is the 135,000 affordable housing units forecast to be needed to address poverty living?  A new $250 million affordable housing bond referendum is on the docket this November.  At what monetary cost is Health and Human Services 29 offices and medical clinics to support a needy population of 130,000, including 40,000 children in poverty.  By determining the Math of Poverty we are appropriately positioned to argue that the cost is unsustainable and policies to address the core STEM and entrepreneurship issue that will eliminate poverty itself are brought to the forefront.   Although no one has estimated the government cost of poverty, it is estimated to cost $1 trillion a year.   The next essential step to eliminating poverty, and to building an economy of the future, is to understand the costs more completely.

 

Positive ROI Economics

 

Austin generated a 239% ROI using economic incentives to encourage the world’s most famous technology companies to invest in the city and anchor a spread of cluster industries that diversify the local economy. The LOCI software informed officials on how much money not to give and how to develop successful economic ROI strategies .  This was an 8 year experiment in the use of economic incentives that produced the 239% ROI, 8000net new direct  jobs, 15 billion in capital investment, and creation of the top Economy in America in 2017.  What if we used the same incentivized system to eliminate poverty?   With measuring software, most citizens regardless of politics will be persuaded to fast track STEM, Entrepreneurship and Creativity in America’s 15 million children in Poverty. 

Think about a potential net new $750 billion annually in increased net new taxes.  If the software calculated a ROI of $50,000 in savings for each child removed from poverty after a 10 period of STEM and entrepreneurship tutoring for example, at the local level, this would mean, depending upon the size of the population, millions of net new dollars available to address the homeless, affordability, parks, infrastructure costs without raising taxes or cutting services.  At the federal level these dollars would allow the US and to pay off the $21 trillion national debt, $2 - 4 trillion dollar.  

 

The nation could implement a strategy to eliminate poverty, beginning first with children in poverty, incorporating them in a supercharged innovation economy, and scale to the adults in poverty with entrepreneurship reskilling.  By doing so we could also address the financial challenges that rapidly approach America. The national debt ($21 trillion), $2 trillion infrastructure costs, rising costs of Social Security, the emerging financial crisis of post disaster economic recoveries, and the lost unskilled jobs dues to automation and AI.

 

Key spending habits resolved include the growing cost of police, jails, courts, as well as increasing costs of health and human services and affordable housing.  By researching and assembling these costs in a block chain ledger we can estimate the huge potential ROI to be achieved by a new war on poverty. 

How we use AI, block chain ledgers and super-computing to document how expensive poverty is today will ultimately result in the right sizing of governments. The freeing of trillions of dollars of government taxes to create an unsustainable and undesirable outcome for our citizens is irresponsible.   The Math of Poverty algorithm produces alternative revenue streams as a direct result of reducing poverty. The new economic tools to accomplish these, economic tools and strategies are at hand. Now is the time to enhance entrepreneurship especially in low income communities, and eliminate poverty. Poverty is not inevitable!

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By Kevin Johns, AICP

CEO Future Economies LLC