Social Credit Debate among Friends #10 
>Date: Sun May 16 10:48:59 1999
>From: (baron fowler)
>Subject: [lets] Interest and service charges
>Your concept of borrowing the principal and the interest at once and
>then giving back the interest would indeed work fine. But, how many
>would sign for a $300,000 loan to buy a $100,000 house and give the 
>bank back $200,000 immediately???  Not many I wager!
     JCT: But when you point out that they're still eventually paying 
the same $300,000 but this way everyone gets to keep their houses, 
they'll all sign up anyway. Then they can raise the issue of the size 
of the fee for the bank service delivered. After all, we're now paying 
for the banker's time, not the money's time. Paying for his time is 
actually cheap, as much as most employees in the casino, often less, 
it's paying for money's time that expensive. I've read or coined a 
great monetary reform axiom "Money does no work." This begs the 
question: So where did the money's paycheck come from? Interest is 
theft from the poor to the rich. That's how my Socred gramps always 
>We then pay the bank back the 300,000 over 25 years as usual. The
>difference, for those not familiar with the math here, is that the
>'interest' on the loan does exist and is injected into the economy in
>wages, overhead and dividends. My only concern is that it still makes
>the shareholders rich at the expense of the poor.
     JCT: But the poor still end up in the house. 
>I would far rather the Government inject the 'interest' in the form 
>of public works, a National Dividend to all and debt reduction. Then, 
>the people get the benefit and not only the top 20% rich.
     JCT: We just need to get interest out of the goverment's and our 
budgets and we won't care who else is getting rich. National dividend 
will end up being the share in national robot production and need not 
be used as a compensatory mechanism.
>As Michael Linton, the creator of LETS points out, "Economists don't 
>see money, like fish don't see water"
     JCT: So what's everyone else's excuse? They're not looking? And the 
economists excuse is actually that they won't look. 
>Also, by Nobel MEMORIAL prize in economics from the Bank of Sweden,
>Soddy said, "Money is the nothing that you get for something so that
>you can get something else." At least he knows that money is nothing!
     JCT: When it's gold, it's something. He realized that money could 
be nothing and the best money is a pure receipt for collateral with no 
intrinsic value at all. 
>Let me state again that the concept of ZERO interest money creation 
>has been successfully used for over 180 years on Guernsey and Jersey 
>in the English Channel. 
     JCT: And don't forget the much larger government LETS currencies 
created by those six Argentinian states in the mid 1980s. This is a 
great story, one would think it would have made the economics 
journals, wouldn't one? "Provinces adding to the money supply 
threatening inflation" headlines resulted in "Inflation goes down." 
>They have no inflation, no debt and no unemployment, no GST, low 
>income tax (flat 20%) and a much higher standard of living than the 
>UK that is groaning under an unpayable national debt.  
     JCT: Debt, unemployment and inflation were also down in Argentina 
after large infusions of local timecurrencies based on the time of 
Argentinian government workers. And of course, the i/(p+i) equation 
predicts exactly that. Making i=0% lets interest-free currency reduce 
involuntary unemployment and inflation along with debt down to zero. 
>I hope that John is correct that the global explosion of LETS systems
>will continue and gradually the 'light' will be seen and we will 
>slowly make the switch over. I believe that it is critical to make 
>these real life demonstrations to show everyone that it does in fact 
     JCT: When I first started my Abolish Interest Rates political 
campaign 20 years ago, there were no models in the world other than 
rumors of Guernsey, a government local currency. 
     It was the real reason I supported the Local Employment-Trading 
System software in the mid 1980s. I never expected small to ever 
compete with the efficiency of big databases but it did provide local 
models of the national and international model I was attempting to 
engineer. I think it's almost here. If AOL or Microsoft Network 
decide to offer LETS timecurrency accounts, it's the last inning and 
I'll be able to retire. 
     It would be fitting if the change occurred to save us in the Y2K 
(Year 2000) with a professional 21 player taking 21 years off the job 
to spend on the project. 
     I finish my first 49 years in 2000 and a Jubilee 2000 would be a 
neat coincidence. Believe me, achieving the usury cure in the year 
2000 would be a remarkable coincidence. 
>I would suggest that all LETS systems bribe the local councils with 
>any amount of 'green dollars' necessary to get them to accept local 
>taxes in Green dollars. 
     JCT: I've often suggested they do exactly that but I didn't 
organize it as a bribe but a pre-paid tax. I suggested asking the 
database for a collection to send them a bundle of notes or 
start up a government account with a list of the people who will 
accept to work for them and a list of things they'd like to have done 
by the government with their taxes.
     And I doubt anyone would vote their tax to pay for defence. I'd 
guess more doctors, nurses, social workers, etc. 
>The LETS can then essentially become the local 'central bank' for the 
>town or city. Once it dawns on them that they can do this at will, 
>they can stop lending from banks at interest. 
     JCT: Actually, I'm amazed that of the many thousands of 
politicians who have examined LETS, seen the benefits and voted to 
provide funding for LETS, I am the only one who has so far seen the 
potential of the government using their Greendollar account just like 
everyone else. There are even several municipal governments which do 
have LETS accounts and as yet, not one has found out how to use their 
government accounts. I'd know how to. 
     Isn't it amazing that of the thousands of such elected 
politicians in the world, I'm the only one who has spoken of the 
greater vision of a world economy run under a LETS software. Isn't 
amazing that of the hundreds of thousands of LETSers in the world, I'm 
one of the few who see the greater vision of international LETS. 
     I think it's amazing that the benefits of a so simple system are 
so difficult for the "conditioned" readers to grasp. It's testament to 
brain-washing that's rendered most people money mad. 
>This is what Guernsey has done. THey now have 18 million Pounds in 
>circulation. The Treasury calls it an 'interest-free' loan from the 
>note holders. They benefit from lower prices and lower taxes.
     JCT: And the town of Ithaca has a couple of hundred thousand $10 
Hours bills being traded around for millions in economic action. Same 
story. Same happy ending. Local currencies can fly. 
>>>"What's this REFLUX?
>>BDF: Reflux means 'a flow back or return'
>If it is the rate at which it exits the account to which it has been 
>paid, then I would say it is the same as the rate at which it entered
>the account (on average) as long as credit increases the money supply 
>to keep up with the increasing number of accounts (people)."
     JCT: Let's not waste our time on considerations of what goes into 
which accounts until Bill provides us with some proof of these acting 
like black-hole nodality balloons. 
>>This reflux from A must be augmented by credit for the firms sector 
>>to make a profit on its sales to consumers.
>Correct, a continuous flow of credit is needed to make the system 
>work. If banks cease lending, then the economy crashes. This also 
>adds about 50% on average to all prices to pay the interest on this 
>credit. Interest causes inflation.
     JCT: But Bill keeps repeating things we agree upon as if he 
thinks it's going to be news to us and is somehow convincing us of 
something. That was a lot of math to come to the same conclusion we 
were already at, wasn't it? Yet, that he can't see how LETS fills the 
problem gap he's trying to prove does make this quite entertaining 
>Date: Sun May 16 17:22:47 1999
>From: ("William B. Ryan")
>John Turmel:
>I had written: 
>>>"...Therefore, if increasing salaries, wages and dividends are paid 
>>>to the consumer sector, the instantaneous REFLUX from these payments 
>>>must be less than A."
>I was then asked: How does Douglas' concept of reflux relate to
>Keynes' consumption function?
>The difference is that Keynes took time out of the equation.
     JCT: I don't remember coming Douglas discussing his "concept of 
reflux" or even using language I did not understand. 
     It's been years since I've opened one of his books and with this 
discussion prompting me to do so, I got to enjoy once again his great 
sense of irony to go with his wry sense of humor. He does not 
castigate us for being so stupid but and sounds more like the 
unemotional doctor explaining the victims of money madness in his 
     I'd challenge Bill to find Douglas talking about reflux anywhere 
especially considering the fact Douglas didn't mix up the flows 
comprising A and B like Bill does. 
>It can be said that at that very moment science was created--because 
>time is the independent variable that is common to all dynamic 
>processes. We can say that with absolute certainty. It cannot be 
>said for any other variable. If we place some dependent variable on 
>the Y axis and anything other than time on the X axis, we are making 
>empirical assumptions that may or may not conform to reality, that 
>derive from an infinite chain of known, unknown and unknowable cause 
>and effect. And when we algebraically manipulate one such "function" 
>with another, we are compounding the probability that what we are 
>doing is complete nonsense. They manipulate functions of functions 
>that are not themselves functions. Whether we see Astrological 
>charts or superimposed AS-AD curves, we know we are not dealing with
>practitioners of the scientific method.
     JCT: So when they do sophisticated computations on an 
initial guess, things get wrong worse. So what? 
     It's sad to see that you didn't learn your scientific method very 
well considering the mistakes I've already caught you on. You didn't 
respond, you just brought up "AS-AD curves." I'm sorry to say that I 
do suspect we are not  dealing with a qualified practioner of the 
scientific method. 
>The following was posted recently to the Post Keynesian Thought list:
>>Substituting equation (6) into (3) we obtain our consumption 
>>     C = wn(Y)
>>Thus, the alternative multiplier can be derived:
>That discussion began with the assertion by someone that increasing
>the minimum wage will increase employment. In Social Credit theory it
>will indeed be the case--that increasing the minimum wage will in fact
>increase employment--because if dA/dt becomes greater than dB/dt, the
>gap between d(A + B)dt and dA/dt is narrowed. Employment, production
>and profits will increase, if only transiently. But such a policy if
>sustained becomes ultimately self-defeating because not only must
>prices accelerate without limit, the displacement of labor by cheap
>foreign labor and automation is also accelerated. A better solution
>would be to supplement wages by something like the National Dividend.
     JCT: Sorry Bill. Bringing up the effects of shuffling the 
paychecks with minimum wages on unemployment while we're hoping to 
restrict ourselves to the question of the effects of interest on 
unemployment is a waste of time, There'll be no in depth commentary on 
what I consider a silly dissertation by a guy who can't keep his flows 
straight even if it ends in a conclusion that proves my model right. 
     You should be ashamed of this stuff. Don't you realize it's going 
on eternal record? 
>Date: Sun May 16 18:07:26 1999
>From: (Kevin Donnelly)
>Joe Zealand writes
>>What you dudes are angling towards is the total 'remission' of the
>>international debit situation and the dissolution of the IMF as it 
>>is currently structured! In the 'Peace' of The Holy Spirit... 
>And a new beginning, a debt-free money system. I just wish more 
>Christian leaders could see this issue as plainly as does Prof. 
>Khurshid Ahmed, known as Mr Islamic Economics: Interest is the 
>mechanism by means of which wealth is transferred, from the poor who 
>must borrow, to the rich who have money to lend.
>Or as has been said elsewhere, interest is a tax on borrowing. KD
     JCT: Or Adelard's Axiom #2: Interest is Theft. Stolen from who 
for who is readily obvious. 
>Date: Sun May 16 09:26:08 1999
>Yes, we do and we don't know the half of it in the west. They don't 
>call 'usury' the Great Evil for nothing. And 'mortgage' means 'death 
>gamble' too!!! The answer is ZERO interest money. Baron
     JCT: It's called the "sin that leads to death." 
>In 1 John 5:16, he notes the problem in one breath,
>Of all the sins the greatest is "the sin that leads to death."
     So it's not a usual sin that is punished by death. It's a sin 
that "leads to death." Not an event but suffers death but a future 
event, a contract leading to death. 
     There's only one such sin that I can verify. If there any other 
than usury that fit the bill as a sin that leads to death, I'd like to 
hear submissions. The death-gamble contract looks rosy at the start 
with everyone thrilled to get the loan and sours at the end when it's 
time to find a way to pick the necessary sacrificial lambs in this 
religion whose losers experience death. If they had any idea they were 
being led to a $300,000 mountain of debt after getting a pile of 
$100,000, it wouldn't seem so rosy a prospect. And once you've 
committed usury as either participant, God'll punish you for this  
violation of Natural Law as he would if you wanted to test his law of 
gravity by jumping off a bridge. We'll suffer the deadly consequences 
from built-in spurs to financial, and hence, economic strife. 
     "The sin that leads to death." What a nice and unique distinction 
to give interest rates and yet also explains the vehemence of the 
Jewish and Muslim saints in denouncing its use to enslave the poor by 
their creditors. 
     I've taken "Usury as the genocide of the poor" six times to the 
highest court of my land. Once how the death-gamble contract really 
works becomes better known and understood, I'm sure people will be 
stunned at how they could have been so foolish, so "money mad." 
     One final point is that Douglas's A/(A+B) equation doesn't 
include time. And as we've seen, inclusion of time in our discussions 
via differential equations has added no new conclusions. Not one. 
     But his confusion about the flows of A can be explained by the 
failure to consider that we're talking magnitudes of A and magnitude 
of B. Most people don't realize that the A in the numerator is not the 
same A as in the depositor. The A in the numerator is the magnitude of 
the purchasing power issued. The A in the denominator is the magnitude 
of the prices created to match it. So even though they both have the 
same magnitude, they are not both money. One part is the tally and the 
other part is the price stub. Adding the B interest price-stubs in the 
denominator without adding to the B money in the numerator above 
causes the instability. 
     At all times, Bill has been talking simply about money flows and 
talking about money flows in the denominator, which are price flows. 
Given this kind of strategic confusion, I can't say that anything can 
be built on such a quick-sand of foundation. 
     If it were a tactical error, I'd keep talking forever. Like a guy 
keeps mischoosing his golf club to get the right distance. But a guy 
who insists on persisting in strategic errors is like the golfer who's 
great with his clubs but can't seem to find the right direction. 
     Bill, sit back, retrench. Play the game once so you can see where 
we're coming from. What can you say about an opponent in debate who 
won't try out the model? There's got to be a good reason he keeps 
coming back to us with with more and more complicated stuff that leads 
nowhere when he could join us in the simple stuff which seems to do 
the trick. 
     And yet I don't know if didn't learn a few things, not in 
rebutting where you were wrong, but in figuring where you were coming 
from that made it wrong. That's what engineers do. When a Nasa launch 
has a problem, they get out the blueprints and work backward to figure 
where it most likely went wrong. Then they send in the technologists 
with the solder kits. 
     Finding out that Socreds may not have realized that Douglas was 
talking about magnitudes of "A" certainly helped delineate them so 
that they should be called (Am) A-Money and (Ap) A-Prices. That's why 
when we discuss the B costs in his equation, we are discussing 
additions to the Aprices, not the Amoney. So talk of Bprices as Bmoney 
isn't in the right hemisphere of the equation. 
     But again, Bill is the Socred who got it wrong, not Douglas who 
certainly expressed the difference. That's why I wonder if his silly 
performance isn't some kind of way to discredit the real social 
credits of Douglas and Quebec.  
     And Baron, if he persists, you should be able to beat his brain 
up with the game theory just as you've recently expressed it. If he 
pitches high tech stuff, look at the conclusion and it it's something 
we already agree on, say "So what? You've proven "nothing wrong with 
LETS" again."  
     And for God's and all our sakes, get involved in my election. 
It's all going to be on the internet. I don't have to be the only one 
asking these parties how they feel about LETS. And after 15 years to 
have heard of it, why not? 
     The major parties are now all on the  net. They use it as they 
use TV, an advertising medium void of open debate. Almost everything 
the voters get to see is controlled. But it's not an advertising 
medium, it's a public arena without any more controllers. 
     I think a handful of helpers might stir up a quite a following 
for LETS by the time this election is over.
     Why can't the Green Party which endorses LETS actively promote it 
for a change? Wouldn't that help? Why is it on their program and do 
none of them ever talk about it? They're sitting on a rocket engine 
which they've put in their lawn-mowers. 
     Thousands of politicians the world over have voted funds for it 
at one point or another. Why aren't the trumpets blaring. Sure they 
don't seem to to have caught onto how to use the instrument for to 
cover their own municipal and governmental financial gaps with local 
currency, and soon, some elected politician may see the light and try 
it out. 
     The Argentinians reported great results of a local government 
LETS bond currency and there are too many historical examples of their 
success to cite them all now: Lycurgus's Sparta, Ceasar's Rome, 
Henry's England, Lincoln's America, Guernsey Islanders. 
     There are too many local currency conferences happening all over 
the world. Bankers are joining the movement. Financial anti-poverty 
life-boats are being built at an exponential rate. I know there are a 
lot more LETS models out there than are being reported. I've heard the 
number 2000 recently. Others were counting that number a couple of 
years ago. I have no reason to doubt anyone's counting. Given past 
growth rates, I'd have expected a double almost every year. It's just 
that the small ones aren't registering with the Big Internet LETS in 
the sky, yet. 
Social Credit Debate among Friends #11
>Date: Mon May 17 02:52:42 1999
>From: ("Charles Michael")
>Subject: Re: [lets] Interest and service charges
>Hi Baron and all,
>Here is an idea to add into the mix of ideas below. If banks are 
>reduced to a flat, noncompounding, service fee, earlier posts are 
>implying that those same banks increase the amount of your loan by an 
>amount equal to the amount of the fee so the money for both loan and 
>principle are brought into existence. It is rather redundant, 
>however, to pay the borrower who then pays the bank back again. 
     JCT: No one pays the borrower. The borrower has the money 
deposited to his account and writes his banker a check. It seems 
redundant but it has beneficial effects. 
>If the borrower pays the fee back in amortized installments, 
     JCT: The fee is not paid back in amortized installments, the fee 
is paid up front already. The total loan principal is payed back in 
amortized installments. The banker's already paid and shopping in your 
>then he is, as you implied, likely to be tempted to spend it on 
>other things.
     JCT: What this "it" he's tempted to spend. The only thing he can 
spend is the credit left in his account after the banker's check for 
service charge is cleared. 
>Instead of this rather silly and cumbersome shell game, why not try 
>this: You take out a 10 year $10K loan with a $1K service fee spead 
>out in $100 per year installments over the life of the loan. 
>The bank "creates" $10K for you up front but we are left with no new 
>money for the monthly fees. 
     JCT: You don't need any new money for the fees, they were paid up 
front. That's the beauty of accounting with LETS. You know the price 
of everything up front. If you only want to borrow $5k and the banker 
spends the same time on service and still wants his grand, you'll 
borrow a total of $6k, pay him and owe the $6k. The $1K which you'll 
earn from him. Spreading it out over all the payments is unnecessarily 
cumbersome as calling your interest-free credit line to pay it all up 
front once and for all. Then accounting becomes simple. 
>In order to create the currency for the service fee the bank would 
>be required to "create" new money and buy a nonrepayble government 
>bond equal to the amount of the fees due for the upcoming monthly 
>or quarterly period.  
     JCT: That's only a convention the present banking system has 
chosen abide by. LETS banks can provide the new Greendollars so you 
can pay your service fee to the LETS bank without having to buy 
anything to anyone. It does help show how really silly some of their 
requirements are. LETS bankers have found that buying bonds from the 
government is an extraneous consideration. 
>This way, the currency needed for the fees is created at the same 
>pace as the fees come due AND the government gets permanent loans 
>that are free of both interest and service-charges. 
     JCT: No, the government borrows money under same conditions as 
everyone else. They borrow enough to pay their fees for the bankers' 
work too. But they are free of owing the interest fee for money's 
>This tax free revenue then becomes part of the funding for the 
>national dividend. 
     JCT: Government loans could be used to fund the dividend but that 
should be unnecessary. A share from the Corporation of Canada's public 
robot production and the tax budget no longer expended on debt service 
payments should suffice. No need for the government to borrow to give 
it away. They'll only have to collect back someday anyway so there's 
an example of redundant flows. 
>This is inspired by the earlier posting (I think by Baron), which 
>suggested letting banks operate unchanged with usury etc while the 
>government just creates fiat money equal to the interest payments of 
>that period. 
     JCT: That's Bill's Social Credit solution. Don't oppose the 
bankers interest, compensate for it with equivalent fiat money. 
>In doing so, government creates the revenue for a generous national 
>dividend without having to raise taxes or do other nasty things. 
     JCT: Divvying up just the interest we're going to save and our 
share in the robot production should be plenty. No need for it to be 
funded by loans. 
>This is a very clever approach since you mostly leave the bankers 
>alone which sidesteps the most potent opposition group.  
     JCT: Sure but we can also sidestep them by performing their 
function of providing currency by starting up local systems to provide 
ourselves with our own. Why represent our collateral with their chips 
for a fee when we can represent our collateral with our chips for 
>Your only challenge then, is to convince voters that they should 
>allow the central government to provide them with a multi-thousand 
>dollar universal entitlement that requires no tax increases.
     You've read my Poem to the Queen explaining exactly where the 
money to fund the dividend would come from. And yet it's not that they 
must be convinced to let government do this for them, it's to convince 
them that it can be done right after the series of dismal failures so 
>I do not know about Canada, but in "something for nothing" America 
>that would sell very easily. Thanks, Charlie. In Denver
     JCT: Douglas doesn't call it something for nothing. He calls it 
your cultural inheritance. If our grandparents tamed the land and our 
parents built this magnificent substruction to support us, we are due 
a share in the inheritance. Right now, only rich kids get it. Please  
don't suggest that the dividend is not morally merited and justified. 
>Date: Mon May 17 09:50:34 1999
>Hi Charles et al:
>I basically agree with your proposal.
>My comments below >>BDF:
>>Here is an idea to add into the mix of ideas below. If banks are 
>>reduced to a flat, noncompounding, service fee, earlier posts are 
>>implying that those same banks increase the amount of your loan by 
>>an amount equal to the amount of the fee so the money for both loan 
>>and principle are brought into existence.
> Yes, this is John Turmel's concept, which will work.
>>This way, the currency needed for the fees is created at the same 
>>pace as the fees come due AND the government gets  permanent loans 
>>that are free of both interest and service-charges. This tax free 
>>revenue then becomes part of the funding for the national dividend.
>BDF: Yes, this will work, if we could convince the banks to buy the 
>service charge from the government. We could theoretically require all 
>banks to 'purchase' all credit from the Central Bank of the Nation. 
     JCT: Yet, this is unnecessary. Where they get it from doesn't 
matter. Each LETS creates its own with a value acknowledged by every 
other LETS. I don't mind banks creating credit. I only object to the 
method they use to collect their fee.
>>But, it would also be necessary to create the service charge by 
>>issuing 'interest-free' money. The beauty of this would be that the 
>C.B. would know EXACTLY how much to issue!!!
>The system would be perfectly in balance at all times.
     JCT: You would always know where you stand since the number never 
moves on its own. You don't open your bank statement wondering what 
your final number is going to be, you open it to see what you expect 
your number should be. 
>>This is a very clever approach since you mostly leave the bankers 
>>alone which sidesteps the most potent opposition group. 
>>I do not know about Canada, but in "something for nothing" America 
>>that would sell very easily.
>BDF: I am interested to here that it would 'sell' in the USA. Most 
>interesting. Canadians are more suspicious I think. Although, it 1935 
>in Alberta, the Social Credit government was elected on the promise 
>of $25/person. That was a lot in the depression.
     JCT: And he would have delivered if the Supreme Court of Canada 
had not blocked his LETS legislation. But he did get around them and 
provide alternate forms of currency in other ingenious ways.
>They never did pay it. But they did issue a 'Prosperity Certificate' 
>in 1936 (see:  search for scrip to see one). It was 
>based on Silvio Gessel's idea of a local currency with a 'demurage' 
>fee each month I believe. The holder had to put a one cent stamp on 
>the back. When all 104 square were full, you could get a Canadian
>dollar for it. The Feds put a stop to it.
     JCT: Just like the Feds put a stop to the LETS in Worgl Austria 
and they all quietly went back on unemployment with the rest of the 
>A note of minor interest: Melvin Sickler, an American, with the 
>Social Credit 'Michael Journal' here in Quebec told me that in his 
>recent trip to the US that no one is aware that the Federal Reserve 
>Bank is a private bank and that all US money is private money. This 
>blows them away he says. 
     JCT: It's old news. Every monetary reformer worth his library can 
tell you that. So the Bank of Canada is not privately owned. They have 
the same loansharking policies. No difference. It's not something that 
has blown them away. 
>But they sure go for the idea of interest free money and a national 
>dividend when the 'light goes on!'
>Regards, Baron. Thanks, Charlie. In Denver
     JCT: Anyone connected with Michael Journal in Quebec would be 
enthused about interest-free currency and a dividend. My grandfather 
learned his Social Credit and kept up on it with their publication. 
     JCT: Ah, Bill, you never get tired of the punishment.
>Date: Mon May 17 17:27:15 1999
>From: ("William B. Ryan")
>Please accept the following as an attempt at constructive
>criticism. As I said earlier, we are in agreement on many issues
>and I really do respect your sacrifice and dedication to your
     JCT: I really think you may. But the time we've spent in this 
debate has proven unprofitable given you won't use the most 
sophisticated tools at our disposal. 
>There is a great deal of arrogant pomposity in your manner of
>discourse, which is off putting, to say the least. You come off
>as the stereotypic crank.
     JCT: It's not easy to avoid arrogant pomposity debating with you. 
I point out an error, you forge right on the same track.  
>Let's dispose of the matter of your self-proclaimed credentials
>I don't know what the law in Canada is, but in Texas it is illegal
>to represent yourself as an engineer if you are not registered.
>That means that not only are you required to have earned a BS
>in engineering from an accredited institution, you must have
>been employed for the prescribed period of time directly under
>the supervision of a registered engineer. You must
>additionally have passed certain board examinations.
>In Texas, there are both civil and criminal penalties if you hold
>yourself out as being an engineer or even imply you are an
>engineer if you are not registered.
>Can you give us the name, address and phone number and
>perhaps email address of the public body in Canada where we
>might confirm your credentials?
     JCT: Okay. I have a B. Engineering from Carleton University in 
Ottawa, an accredited university. I went into gambling engineering and 
found no qualified registered engineers to supervise me. I went into 
banking systems and found no qualified registered engineers to 
supervise me. I only spent 20 years on the project. I have never 
submitted to any boards on my expertise in gambling or banking systems 
engineering though I have no doubt my LETS Engineering Mathematics 
will establish my expertise in banking systems engineering and I'd 
cite that I am the most court-accredited expert witness in the 
Mathematics of Gambling in Canada. 
     I once had an engineer complain to the Professional Engineers 
Association of Ontario that I was wearing a hard-hat with the title 
The Engineer. They suggested I need apply. I wrote back that I didn't 
and it's the last I ever hear of it. 
     I found my 1981 response in my journals:
>I sent a letter to the Association of Professional Engineers of 
>Ontario. Mr. Christopher Hart wrote to say:
>"It has been brought to our attention that you are using the title 
>"Engineer." The Professional Engineer's Act provides that no person 
>other than a member may use the title or designation "engineer" or 
>variation thereof, or hold himself out to be an engineer.
>In using the title "Engineer" you are holding yourself out as an 
>engineer, although a search of our records shows that you are not 
>currently registered. We look forward to your prompt reply.
@MINE = Mr. C.C. Hart, P. Eng., Association of Professional Engineers
@MINE = Dear Sir:
@MINE = In your letter, you pointed out that no person may be titled 
"engineer" without being a member of your association. I would 
therefore appreciate membership forms and enclose a copy of my 
@MINE = I have specialized in banking systems engineering and offer 
you the equations. I have run in elections, fought the banks in court 
and have designed a perfect barter system.
@MINE = The elimination of the usury instability in the system leaves 
most people incredulous and it is to reinforce my argument that my 
system is not a dream but a technical design that I wear my trademark 
white hardhat titled "The Engineer." 
@MINE = In order to dispel any notions that the title is unwarranted, 
consider which accomplishment Albert Einstein would have deemed more 
important to the well being of mankind, the algebraic solution to the 
energy-mass riddle or the algebraic solution to the inflation-interest 
riddle. As the discoverer of these equations, I submit that regardless 
of my professional accreditation, history will agree that I am,
@MINE = The Engineer
     JCT: I didn't have time to follow up and neither did they. And 
again, I'll let my engineering LETS be my record. Can you think of  
anyone with better credentials to be called a banking systems 
>The reason I raise this as an issue is that you have made
>Many elementary errors a professional engineer would be
>expected never to make.
>Especially egregious is your corruption of what is meant by the
>engineering method. An engineer may design a system using
>Laplace transforms and the like, the tools of his profession. I
>have no problem with that. And I have no quarrel with the
>internal consistency of your model per se. The problem is the
>economy is not something you have personally designed for
>which you are the expert. What you have presented is nothing
>more than a model purporting to represent the way the real
>world economy is in fact constructed, which is an assertion
>subject to empirical verification. Such empirical verification is
>the domain of science, not engineering. The scientific method
>is to observe then explain; to hypothesize then verify. You are
>like the quack doctor who dogmatically insists on his theory
>of subluxations, in the face of all evidence to the contrary
>simply because it makes sense to you and you alone, and a
>small gaggle of followers.
     JCT: If there's evidence to the contrary showing that LETS has 
any flaws, you haven't shown any. You've stayed away from trying to 
show nodalities in LETS like the plague. 
>You have repeatedly made glaring errors like the following,
>from your post of May 17:
>One final point is that Douglas' A/(A + B) doesn't include
>Such an error is astonishing from someone so disdainful of the
>opinions of others like yourself, who claims to be such an
>expert in engineering and the techniques of mathematics and
>Social Credit. Douglas never, repeat never ever, discussed his
>theorem except in terms of rates of flow of A and B
>payments.  Now I ask you, how is it possible to speak of rates
>of flow without by necessity also incorporating the concept of
     JCT: Take a look at the equation. A/(A+B). It's a fraction. I 
don't see a derivative or integral at all. It's a fraction of flows 
that applies in the game theory which you've not kept up with. But 
there's no need to discuss time. We're already discussing rates. Find 
Douglas putting in a "t" somewhere in his A/(A+B) theory, you might 
have a case. But he always called it the A/(A+B) theory. 
>In Credit Power and Democracy he not only defined A
>and B payments as rates, he referred to money specifically as a
>rate. Your engineer's definition of rate must differ from that
>found in ordinary engineering dictionaries. And there are
>indeed many instances where Douglas used the actual word
>"time" in reference to his theory.
     JCT: But not in this equation. Why include the "t" when your 
variables are already defined as functions of time? It's built-in. 
Already included. Repeatedly pointing it out hasn't helped. 
>One thing I will acknowledge, you are indeed an expert at straw
>man argumentation. Bill Ryan
     JCT: In this case, your argumentation was indeed straw. But I  
didn't build it, you did. I only knocked it down. The fact you're 
still arguing with me about something quite elementary tells me that 
you're failing the only available course in real banking systems 
>One question that you ducked the first time around:
>If the banker PAYS interest--which he fact does do, not only to his
>saving account depositors--just who or what is it that is the
>ultimate usurer? 
     JCT: So what. The ultimate users are the positives who don't know 
any better having been led astray by the bankers and economists. So 
investors are guilty. They collect interest despite the prohibitions 
in all their Good Books. They'll be judged sinners. But God says that 
there's special punishment for those shepherds who led the sheeple 
>>JCT: After eight previous exchanges, Bill still hasn't once faced 
>>our demand that he show one instance where money to government or 
>>other firms doesn't get into the hands of consumers.  
>IN REPLY: Actually, I did answer that but I'll repeat it. It is
>a matter of differential rates. In single stage production there
>are only A payments. In multi-stage production there are both
>A and B payments. Every firm in multi-stage production is
>simultaneously making A and B payments, corresponding to the
>rate of flow of costs. B payments are by definition not made to
>consumers in the first instance but to firms, into account
>balances held internally within the firms sector. B payments
>ultimately may be on their way to consumers but are first
>deposited into accounts within the firms sector by the recipients
>of these payments. 
     JCT: We've told you half a dozen times that LETS credit fills the 
gap while we wait. Why are you repeating this? Will it take another 
half dozen before it gets through that pointing out a gap we've all 
noticed quite early in our discussion? Every time you pointed out the 
gap, we pointed out the LETS credit. And we've pointed out that the 
actual lag is weeks if not days, these days. 
>outputs from nodalities will equal inputs. If the economy is..
     JCT: Not interested in nodalities you haven't producced.
>Let's go back to our pipeline metaphor.  
     JCT: Let's not. Nobody uses elastic balloons with their pipes.
>But if the volume is increasing analogous to increasing...
     JCT: If, if, if, not. We're dealing with LETS models, not Social 
Credit theory. 
>I know these concepts are difficult to grasp. 
     JCT: Yes, you've certainly shown us that.
>Neither Hayek nor Keynes could grasp them. And no one ever accused 
>them of being intellectual lightweights. Bill Ryan
     JCT: Yes, I never heard of Keynes or Hayek talking about 
ever-expanding nodalities. Luckily, I never heard of Douglas talking 
about them either. 
Social Credit Debate among Friends #12
>Date: Wed May 19 12:31:44 1999
>From: ("William B. Ryan")
>The A + B Theorem is merely a tool that helps us to analyze financial 
>systems where disbursements by the firms sector are costed into the 
>prices of production, where production is sold through markets, no 
>matter if the system is Capitalist, Social Credit, LETS, or ESOP. It 
>applies equally to any conceivable market economy.
     JCT: It's quite amazing that after pointing out in example after 
example that LETS does not suffer from any B imbalances other than the 
one we claim, the interest, that he would continue with say that the B 
costs we say have no effect still do. 
     I know it's tough to debate with a guy who pontificates from on 
high and never responds to our objections but if he chooses to keep 
claiming flaws in LETS that we don't see, but never once backs them 
up, what can we say about his scientific method? Unless you can show 
us one B cost that causes a problem in a LETSystem, I'm going to have 
to conclude that Bill's a charlatan who's here to cause trouble. 
     After all, isn't this group supposed to be for the initiated? 
People who understand how LETS works, not for those who don't. 
     We've been ready to discuss any problem Bill might want to raise 
about the functioning of LETS and over the space of 11 previous 
posts, we've never once had any of his claims backed up. Having 
someone who keeps yelling that something's going to go wrong but who 
never elaborates with other than erroneous math and assumed nodalities 
is not helpful in the least. Bill, if you can't put up then it's time 
to shut up. 
>The theorem can be expressed in the form of an equation of exchange: 
>A+B=the REFLUX from A+B plus Credit, broadly defined. 
     JCT: This is silly. You still haven't defined reflux and the only 
reason you' ve assumed that the reflux of A+B is less than A+B is 
because you made up some nodality balloon to absorb it. When we asked 
to you prove that such nodality existed, you backed down. But here you 
are again still arguing that your nodalities cause this inequality. 
How about facing some of the hard questions we've given you instead of 
continuing on with assumptions of your imaginary nodalities?
>Expressed this way, credit is the determinant of monetary flows, 
>thus it determines the instantaneous magnitutude of A+B. As such, it 
>is not only facilitative but essential to the process of production 
>and consumption. Harnessing it as a control variable, it becomes 
>available to us as a mechanism that can be consciously adjusted or 
>augmented to improve productive efficiency. Bill Ryan
     JCT: That's what LETS credit does even if you can't see it. 
>B payments can be thought of as in the pipeline on their way to 
>consumers. Bill Ryan
     JCT: Douglas's whole point was that the B payments did not reach 
the consumers. It's certainly the case when interest is a B costs but 
not for any of the others. Bill, if you can't even get Douglas right, 
what are you doing trying to argue Social Credit? 
>Date: Wed May 19 20:56:25 1999
>From: ("William B. Ryan")
>(Forwarded from the Post Keynesian Thought list)
>What William B. Ryan argues below:
>IMO a very interesting insight, is that the time lag (i.e. the mean
>time it takes for an average unit of currency to emerge from the firm 
>sector as wages, profits or taxes - after having been injected into 
>it) increases with TWO factors:-
>--The inverse money velocity ( = time lag) of the average firm.
>--The degree of interaction between firms, i.e. the average share
>going to other firms instead of out of the firm sector.
>This is treated in detail in the reference below.
>The Macro-economy as a Network of Money-Flow Transfer Functions
>ABSTRACT: An introduction on A.W. Phillips' hydraulic macroeconomic 
>models is given. His (and other economists') notion that a 
>macro-economy may reasonably be considered to have dynamics 
>corresponding to a first order time lag transfer function, is 
>justified in this paper by aggregation of individual micro agents. In 
>connection with this economic application, I derive and discuss a 
>theorem and some rules for general networks of time lagged blocks. 
>Finally, Monte Carlo simulations of networks of micro agents are 
>undertaken, supporting the validity of the first order time lag 
>aggregate model. -in "Modeling, Identification and Control", vol. 19 
>no. 4,1998 - also available at:
>Trond Andresen. Department of Engineering Cybernetics
>The Norwegian University of Science and Technology
>N-7034 Trondheim, NORWAY.
     JCT: So Bill has found a hydraulic model talking about time lags. 
As we've repeatedly pointed out, LETS credit fills the gap until the 
time-lagged money finally reaches the consumers who then pay back the 
LETS for the earlier consumption. Just as if they'd had the money in 
the first place. Which LETS effectively did. So get the professor to 
look at how these time lags affect a LETS and I'll bet that he finds 
that they are in fact handled. 
     What's amusing though is that the hydraulic models for both the A 
and B circuits in Douglas's equation are shown in Fig 10 of my Of course, this entails 
considering some elementary control circuits which renders the topic a 
little to elementary for Bill's more complicated tastes. 
     Still Bill, as long as you persist despite the mathematical 
errors that have been pointed out, I see little value in your input. 
As engineers say: Garbage in, garbage out. We've been ready to listen 
and all you've shoved us is more garbage. 
     I wish I had the time to keep correcting your errors but it seems 
you're a perfect example of the truism that "a man convinced against 
his will is a man unconvinced still."  
Social Credit Debate among Friends #13
>Date: Sat May 22 19:17:03 1999
>From: ("William B. Ryan")
>John Turmel:
>I had written: "B payments can be thought of as in the pipeline on
>their way to consumers."
>John Turmel replied: 
>>"Douglas' whole point was that B payments did not reach the 
>>consumers. It's certainly the case when interest is a
>>B cost but not for the others."
>You've misrepresented Douglas so many times, John, that I am now
>issuing an absolute challenge. It's time to put up or shut up. 
     JCT: Are you joking? I've challenged you on your errors and 
assumptions a dozen times and you didn't accept once. Now you expect 
me to hop to your challenge. Respond to mine first and I'll have 
reason to take the time.  
>Where did Douglas say that B payments do not reach consumers. I want 
>the actual citation so we can look it up for ourselves, so we can 
>judge the context in which it was written.
     JCT: As soon as you've responded to all my previous challenges, 
I'll go to Ottawa and dig out his books from my library. But first, I 
think I told you to put up before you told me. 
>A case can be made, I will admit, that when principal is repaid, it
>vanishes. But that cannot be said for interest--despite how many
>times you make that absurd assertion--for when the banker receives it,
>he transfers it to his personal account, from which he can spend as
>he wishes. 
     JCT: I'm amazed that you cannot follow the simple plumbing 
diagrams in Fig 3 of my
     As all of us can readily see, considering the principal payments 
go down the drain and the interest payments go into the reservoir, it 
would indeed be absurd for me to claim that the interest goes down the 
drain too. Evidently, I've never made such an absurd claim or I 
wouldn't have drawn the pipe for the interest leading to the 
>The banker is himself a consumer. Interest therefore never leaves the 
>wheel of commerce, just as profits never leave, and savings never 
>leave. Bill Ryan
     JCT: That's exactly what Fig 3 shows. So why are you confused 
unless you haven't been able to follow the pipes with the rest of us?

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