I propose a modification, ``Phase Two,'' of Senator's Mackie's proposal, SJR33, to constitutionally redistribute $18 billion of the $28 billion Permanent Fund. This modification would during a 10 year period shift ownership of your portion of the fund from the state to you, while creating for you a substantial individual retirement account, education account, or investment account at a comfortable risk level - this by utilizing the Permanent Fund Corporation's financial management expertise, the same people who brought you the dividend. In addition, it would encourage retention of Alaskan residency, avoid flooding Alaska with instant money, prevent a ``people-rush'' into the state, encourage savings/investments and, lastly, retain $10-plus billion to provide a $500 million a year state funding supplement.
All this by tapping the fund's incredible potential to provide Alaskans with a powerful investment tool to help secure their future by providing them (including newborns) with investments worth, over 15-20 years, potentially hundreds of thousands. So here's the simple secret: Compounded interest for 15-20 years on quality stock investments in the most powerful, dynamic, economy in the world.
That right! Partial ownership of companies such as Microsoft, Wal-Mart, Coca-Cola, IBM, GE or Intel, etc., in which the Permanent Fund already has investments. Here's the basic proposal:
1) Transfer much of the fund into 588,000 individual escrow accounts. Each Alaskan would then select from among three investment plans. They are: A) conservative (the current fund structure) annual average growth of 12 percent; B) growth: higher proportion of quality stocks. 50 year S&P average is 13.6 percent; C) aggressive growth: mostly high-tech NASDAQ and S&P stocks at, say, 20% yearly (check out www.fool.com/school).
2) Seniors, age 63 as of 2000: Same as above plus one-time $1,000 per year bonus for each year of residence in Alaska prior to 2000, up to 50 years. Bonus may be cashed-in immediately.
3.) Newborns: $1,500 per year until age 17 (Program expires in 2018 - possible legislative extension?).
4) New residents: No monetary benefit. But may buy into the fund management with $25,000 deposit
5) Five years later, in 2006, each resident may begin cashing in their account at about 20 percent per year, with 100 percent withdrawal by 2010. Of course, federal taxes may then apply.
This letter merely sketches the proposal. Email me at LSLONE@msn.com for investment examples.
Larry SloneFargo, ND