AUTHOR´S EDITORIAL 16/01/2002
S.O.S. ARGENTINA. Emergency

The ideas of “globalizing housing”, “zero cost”, “ordinary reserves”, “financial reserves” and “remainders” contained in the Project that I present in this page, are not a stroke of genius but rather the application of experience, observation and pure arithmetic to concrete objectives. The combination of these three elements generates immense resources, obtained without debt or emptying any pocket. Resources aimed to promote employment, provide housing, education and real help to the less favored sectors of society, in any country, on any continent.


The crisis in Argentina gives me the opportunity to explain my Web to the citizens, with details of what should be done in the economic aspect in order to get out of the paralysis in which the country is submerged and to take care of urgent family needs. Whether they follow my recommendations or not is out of my competence.
Globalizing housing means proposing the construction of necessary housing where it is needed. If this statement is true, we are on the way to creating massive employment in construction and also indirect employment in all the industries that supply the necessary goods. Result: start the motor of economic reactivation.
Where and how can the resources necessary to finance the Project be obtained? The answer that I give is simple: turn to self-financing, without the need of going into debt or receive aid from the IMF.
Self-financing is achieved based on the following realities:

There exists an enormous volume of internal capital formed by the potential savings that the Argentine workers in full employment could contribute in the next 30 years. These savings will be materializing while salaries are being earned and, therefore, serve as a guarantee for the obligations that are accepted today for the purchase of a house with long-term financing. The goods that are acquired are real and can be used immediately by the owners, who will periodically dedicate part of their salary to paying the quotas that become due for the committed obligations.

We can link this potential for periodical payments backed by future work to the amortization of capital obtained from the issue of Bonds. The volume of this issue depends on the savings represented by future work, calculating that its value as means of payment will cover the amount of the quarterly amortization of the Bonds, that is, today we emit Bonds that we will amortize in 30 years with quarterly payments of an amount equal to the payments made by the purchasers of the houses. It is a financial operation with a double touch: we issue and sell Bonds for cash and we invest the liquid value attained in the construction of houses that we sell on credit. We will pay our obligations with the quarterly payments made by the buyers of the houses. The amounts coincide, as do the periods of receipts and payments, during 30 years. We only need to coordinate the issue of the Bonds, the construction and the sale of the houses, collect from the buyers and pay the periodical amortizations of the issued Bonds. In this way we are using the potential of future work, which we accumulate with the constant construction of houses, in order to obtain initial capital that permits stimulating immediate work and attacking unemployment.

With this equality established, Argentina can construct the needed housing with ZERO COST, create employment and reactivate the economy. It only needs to take a census, without restrictions, of all the citizens that want to acquire one of the houses that are to be built, whose characteristics, as initial reference will be: 100 m2 in surface area. Maximum initial payment 15%. Period of 30 years to pay. Fixed mortgage interests, less than 7%, including life insurance and certain family aids. As a guarantee of fulfillment, when registering in the census, a minimum bank deposit will be made on account of the initial payment.

Apart from the self-financing, in this phase of the construction, net income is obtained, and is available, the so-called “ordinary reserves”, that can be calculated at around 10.5 percent of the cost of construction (See Web page).

To consider figures that make or that at least contribute to making the Argentine Embassies, communication media and the President meditate and pay attention to my Project, I refer to the Web page where it can be seen that having received 500,000 petitions for a house, income calculated in 55,490 million euros would be available for issuing guaranteed Bonds. Of them, 45,000 million euros would be for the construction of the houses and the other 10,490 million euros would be for free use, leaving, in addition, another 553,400,000 euros yearly during 30 years for Research and Development.

It is possible that voices appear that argue against the Project, calling it an impossible utopia, they will say, to move Bonds for so many millions of euros. I call on them, with financial tables in hand, to reject my conclusions. I will show them how, where and why they can absorb as many Bond issues as are put into circulation, even indicating to them other reserved sources for generating resources.
And remember that only 500,000 houses have been programmed for construction.


Extraordinary resources in “financial reserves” and “remainders”

In the same way that I have showed how to construct houses with ZERO COST, now I will apply the fiscal engineering to obtain enormous free-to-use resources, with no type of indebtedness or burden to society.
To finance the houses, we turned to the potential for payment that the salaries represent in a space of 30 years. In order to have, today, those resources obtained by fiscal engineering, I am going to outline how to get them.
a) 500,000 houses are individualized.
b) Each quarter we receive the payment of the mortgages.
c) Also, quarterly, the amounts received serve to pay the amortization quota of the first Bond issue.
d) The amortization quota is made up of two parts: the interest on the debit balance and a part as return of the mortgage.
e) The interest is subject to withholding for capital income tax.
f) The withholdings correspond to self-generated taxes, without cost or investment.
g) The withholdings collected are not calculated in the Budgets as ordinary resources, which they are not, but instead we use them to amortize a second Bond issue.
h) Through the same process, we will have available a third Bond issue. There will be three issues: the first used to pay for the construction costs; the second and third issues are net resources, obtained without investments and without debts.
i) If we adopt the final amortization of the Bonds, with the right to premium of 50 percent of the nominal value, there appear quarterly “remainders” whose capitalization form the basis of autonomous financing of large projects. (See details in the Web page)

In summary: the fiscal engineering we have referred to is nothing more than using today the taxes that will be earned in the next 30 years originating from the system of building self-financed houses, that is, with ZERO COST. It is not a lottery, but rather the result of the administration of productive work.


As a personal opinion, I will add that it would not be fair that, for political or partisan principles, this Project is not recognized and the Argentine people are deprived of the means for economic liberation that I propose, based on permanent jobs, a source of realization for the human being.

I send this document to the Argentine Embassies and Consulates in Europe with the objective of transmitting it to the President of Argentina, Mr. Eduardo Duhande, before integrating it as an editorial in my Web page, in the different languages in which it appears. I have also sent it to the United Nations, responding to the generic invitation to present suggestions for the world Conference, at the level of Heads of State and government, to be celebrated in March, 2002, in Monterrey, Mexico, to tackle for the first time the financing of world development. My suggestions are concrete.
1. Construction of houses with ZERO COST.
2. To have now the self-generated taxes, in billions, that will be earned during the next 30 years.

**** No matter how much the participants of the Monterrey conference rack their brains, they will never be able to introduce proposals for financing that contribute the immediate solutions that I present in my Project. They will contribute brilliant speeches, good intentions, a pathetic call for solidarity between countries and the good attitude of the rich countries towards the third world countries. After they study more and more the differences between the poor countries and the rich ones, and the outcasts will continue their unknown destiny. It is also probable that a date will be set for another conference to continue seeking solutions for the financing of the development of the poor countries.****

**** If the things turn out like this, to whom should we demand responsibilities for not seconding a Project that solves the financing of development? Is no one capable of championing such a Project? Is Argentina not conscious of the emergency situation in which finds itself? ****

Francisco Montaner


Globalizing housing with zero cost