The actual reality that many retirees do not have and will not have enough resources to support themselves in their retirement stage forces us to come up with original ideas on to make that sad truth a less dramatic reality and to solve the financial paradigm, of retirees asset rich income poor demanding more social services and the younger people asset poor labor available to provide services.
So, the first approach is to create the retiree card holder, to basically solve this problem theoretically in the immediate reality, to then subsequently apply this theory to solve it realistically. This application in turn will lead to build a new robust model of our today’s model in superannuation.
First, a basic introduction of the idea. The roots of the retiree card holder theory lays down on the application of Silvio Gesell (Germany, 1862-1930) economic theory: Free money and the Natural Economic Order, in the city of Wörgl, Kufstein-Tyrol- Austria, during the Great Depression.
Further support of Gesell’s economic concept comes from John Maynar Keynes when he cites him in his General Theory of Employment, Interest and Money: “Gesell’s main book is written in cool, scientific language; though it is suffused throughout by a more passionate, a more emotional devotion to social justice than some think decent in a scientist…I believe that the future will learn more from Gesell’s than from Marx’s spirit.” (John Maynard Keynes, General Theory of Employment, Interest and Money, London (1957), Book 6, Chapter 23, Section 6)
With the realization of the local retiree card in the LGAs, the support for the scheme comes from two main players, first from the Australian government through a web portal encouraging businesses to show their support for the LGAs, local retiree card by advertising their product or service in their web portal. The other, is businesses participating in the scheme offer discount purchase price for their product or service to retirees.
The expectation of the benefits of using the local retiree card holder within the issuer LGA is a win win situation for the many parties participating in it. The main difference and advantage of the local retiree card it is that it is not pegged to the Australian dollar since it is a discount card, neither it runs out to expiration since this can be used by the retiree anytime as much as need or not used at all. The benefits of the local retiree card can be listed in ten main points:
1. The local retiree card is highly liquid since it can be used to purchase a product or service at any time.
2. It can create jobs for the retirees due to the possibility of local produce products and services, helping develop local small enterprises in the LGA.
3. Increase the cultural values and traditional activities within the LGA, strengthening the community.
4. Increase the circulating of the economy within the LGA.
5. Retirees would increase their savings and decrease their time in poverty.
6. The money needed by the retiree to support themselves can be found within their LGA
7. The LGA will grow economically developing personal confidence within the LGA.
8. Increase equality among retirees in the LGA
9. The LGA can achieve low market risk of default and so, retirees can access low interest borrowing rates.
10. The retirees can increase their purchasing power within the LGA
When people reach the retirement age, they are allowed to apply for the LGA local retiree card through their local LGA and hold use the card permanently within the LGA. Retirees can use this card to purchase a product or a service at a subsidized discount price anywhere within their issuer LGA. Further complexities of the use of the card are not developed as such yet for simplicity reasons of presenting the recommendation.
Examples on how the retiree will benefit on using the card, can be shown in the performance of three different strategies using a relative