Eliminating the national debt with life insurance
Rutland, VT (PRWEB) July 26, 2011
American Benefit Corporation’s James Herlihy has released an open letter to government leaders on how to eliminate the National Debt for our children and grandchildren:
In finance the simplest ideas are often the most effective. The current federal debt is approximately $14 trillion. This can be eliminated in 30-35 years without the need to increase taxes or reduce spending. However, there is considerable room to reduce government spending.
Individuals and corporations buy life insurance because they wish to transfer the risk of financial loss when the insured dies to a third party – an insurance company. This concept that has successfully worked for individuals and corporations for more than 100 years can effectively be used to eliminate (not reduce) the federal debt.
The United States Treasury should acquire approximately $3 million of life insurance from a consortium of United States life insurance companies on approximately 5 million Americans who are willing to submit to an insurance physical. This will develop a total insured amount of approximately $14 trillion, which is equal to the current national debt. The United States Treasury will own and be beneficiary of each policy. If the current insurable interest rules do not accommodate this concept they should be changed in the national interest.
Ideally, the insured lives should be age 50 or older since they will reach life expectancy in 30-35 years and the national debt can be eliminated for our children and grandchildren.
The time to do this is now when the cost of capital is lower than it has been in decades. The required life insurance premium could be financed by selling debt to foreign governments. If the correct assumptions are realized the financing cost of capital may also be recovered when the insured dies. Further, participating insurance companies would have additional capital to invest in the U.S. economy.
From 1941-1945, the greatest generation put 16 million men and women in uniform, fought a war on two continents, won them both, and then rebuilt Europe. It would seem that the American boomer generation should be able to organize some insurance companies and take 5 million people to the doctor.
About Us -
At American Benefit Corporation, we design, fund and manage executive non-qualified benefit plans for highly compensated corporate executives who wish to reduce current income taxes and form personal capital on a tax efficient basis. Established more than 30 years ago, we serve the unique needs of executives in numerous corporations with their personal capital formation objectives.