A Social Credit Debate among Friends #4
>Date: Tue May 4 12:34:04 1999 >From: bfowler@NetRevolution.com (Baron Fowler (BDF)) >John: I need some clarification on a few points:
>>BDF: I also now agree that the amount B in the A+B Theorem is >>entirely interest on debt. ALL other costs for tax and so on get >>'recycled' into wages eventually or the A amount. >BDF: I need to amend the above statement. >Now, the B amount is all loan payments, which include a payment on >the Principal and the Interest. The Principal amount then vanishes >into nothing when it cancels the debt principal. This is John's >engineering 'sink'. >The Interest amount is the bank's income, which is paid out in >wages, overhead and dividends. The dividends make the rich, richer!! >But the money stays in the pot and does not disappear. The missing >Principal then must also be replaced with new loans, which come from >the invisible 'source' (nothing). > >John's previous reply to my original statement above: >>JCT: That's right. So granting that the A amount is the principle >>P of money issued into circulation for spending and the B amount is >>this A=P amount plus only the interest I means that my P/(P+I) >>equation fundamentally agrees with his A/(A+B) equation. >BDF: John, I missed something here. How is "B amount is this A=P >amount plus only you are correct, if you mean that the Interest is >the 'Interest payment'; which includes the Interest payment plus a >Principal payment. This is what I noted above in my amended >statement. This is why the system is continually short of money to >purchase goods. The principal repayment disappears. There is no end >to this and the interest keeps going to the stockholders and they >continuously get a greater and greater share of the total wealth. >This is Paul Swann's point. JCT: I'm not talking about payments to the banks. I'm talking about prices charged in an attempt to make those repayments to the banks. My premise is that everyone borrows the principal and everyone owes the principal and the interest. So even though only the principal was paid into circulation for production of goods, prices must be raised beyond the amount of money in circulation to repay the banks. We must first look at what happens in 1 cycle to see the death-gamble nature of the mort-gage contract.
>Furthermore, since the interest does not exist, bankruptcy is >necessary to provide the missing money to pay it. JCT: Bankruptcy does not provide the missing money. It writes off the extra debt.
>In the end, most end up as slaves. There is then a revolution or >system collapse into total chaos. This is what happened with the fall >of Rome; 500 years of darkness. JCT: Let's not forget that before the Roman empire acquired it's inflationary frenzy for gold, it grew into an empire using interest- free Aes Grave government copper currency. Just as the United States was booming with the use of Continental currency before it was banned by King George forcing them to use gold and resulting in paupers in the streets (Ben Franklin said they would have easily borne the tax on tea had they not taken away their own Continental currency, the true cause of the American revolution) and just as Abraham Lincoln won the civil war paying for his army and administration with interest-free Treasury Notes before the bankers conspired to have its use discontinued, so too, the Roman empire which had grown powerful could have just as easily been fooled into giving up the use of their own currency and using interest-bearing gold. See David Astle's Babylonian Woe in the book reports section of my web site for further details.
>I just read ('A Matter Of Life and Debt' by Eric de Mare) that 80 >civilizations have collapsed due to monetary instabilities caused by >usury. Are we next??? JCT: And David Astle provides the details.
>Note: On second thought, I think that I was right the first time. >The B amount is interest on the Principal which is all (I think???) >the money in circulation or A. Since the interest does not exist, it >must be taken from the pot of money which is A. This reduces A by the >amount B, plus any principal payment. If there is any Principal >payment made this is A / T; where T is the repayment period in years. >Thus, we have a short fall in money in circulation by the amount A - >(B+A/T). When the payment is made the amount A/T instantly vanishes >as noted above. JCT: Actually, since the interest is not taken out of circulation, it does not reduce A. Remember that the P/(P+I) theorem deals with purchasing power available versus prices charged. There is only one best way to grasp the elementary nature of the discussion and John Von Neuman says that it is only through the theory of games that you can get it. So get some friends to a dinner party and play two games. This stuff is so tricky that there is no better way. It's not enough to think about it, you must play it to be convinced of the simple nature of the dilemma.
>Date: Tue May 4 16:48:36 1999 >From: email@example.com (john courtneidge) >Subject: [lets] Re: TURMEL: A Social Credit Debate among Friends #3 >Dear Friends >The key, I suggest, is that we are aiming for a two-stage process. >Capitalism creates scarcity (of opportunities for people to live the >lives that they dream). JCT: LETS capitalism is wonderful. It's the monopoly capitalism of usury that causes the scarcity.
>Interest-free economics (the economics of friendship) creates the >possibility (and expectation) of abundance and, thus, of security. >And then... >People can then opt for lives of simplicity (the green-er agenda), >secure in the knowledge that, when need arises the resources *will* >be there. I hope, friends, this helps, John Courtneidge Both true but don't blame capitalism. There's nothing wrong with the person who gathers the most having the most.
>Date: Tue May 4 22:02:40 1999 >From: bfowler@NetRevolution.com >Subject: [lets] Duel Economy >Greetings to All: >Yes John, I think that you are correct in that I think we are at the >beginning of the shift from 'capitalism' to 'sharism'. Capitalism is >a system in which the wealth is concentrated by ownership of capital. >Aided by usury of course, it is now in the final stage where it must >grow to global dimensions or collapse. JCT: Again, I stress that capitalism if okay, it's only when it's just the rich guys who can get credit to buy capital that a monopolizing tendency exists. It's funny but I've had Tories call me a Communist because they see the socialistic nature of everyone getting to play while Communists have called me Capitalist because they see the free enterprise nature of everyone getting to keep what they earn rather than each producing according to his skill but getting according to only their need. I see nothing wrong with everyone shooting for their wants.
>Since it cannot grow beyond the planet (yet) it must reach its >maximum and implode. This is why we are witnessing these gigantic >mergers of gigantic firms. The way is being prepared to feed the >planet to these giants. JCT: Not if we don't use their enslavement device as our accounting mechanism.
>Date: Wed May 5 00:50:06 1999 >From: firstname.lastname@example.org ("William B. Ryan") >SECOND REJOINDER: >1. WBR: In Douglas' notation, A are payments firms make directly to >final consumers in the form of salaries, wages and dividends. B are >payments firms make to other firms or equivalent entities, including >government. There are accumulating account balances in both the firms >and consumer sectors. > >>JCT: Where do you think the money paid to government goes? To people >>to be spent. Where do you think money paid to suppliers goes? To >>their employees to be spent. Sure the interest can be spent but not >>in the original cycle. >In reply: The A+B Theorem is concerned with differential RATES of >flow per unit time. A+B represents the rate of flow of costs. A >represents the rate of flow of purchasing power disbursed to final >consumers. JCT: So how long do you think the government keeps your taxes in its coffers before it pays them out into circulation? Since they're always in debt, I'd say that money collected by government is disbursed to consumers within weeks if not days. The same thing for many of those suppliers. I'd say that much of the money ends up in the hands of consumers in months if not weeks. I just don't see
>>JCT: That's right. So granting that the A amount is the principal P >>of money issued into circulation for spending and the B amount is >>this A = P amount plus only the interest I means that my P/(P+I) >>equation fundamentally agrees with his A/(A+B) equation and there was >>no misrepresentation of a straw man argument on my part. >In reply: You began your initial rebuttal by asserting: "A represents >the money issued into circulation and B represents the prices >demanded for the goods." This is the straw man. Nothing resembling >this appears in anything written by C. H. Douglas. JCT: Then you don't understand his A+B theorem. A is purchasing power getting into the wallets of consumers, A+B are the prices they try to buy with the A money they have in their wallets. His A+B theorem states that the purchasing power is insufficient to recoup the prices. With this analysis I agree.
>In Douglas' theorem, A+B represents the rate of flow of costs. JCT: And the rate of flow of costs is the rate of flow of prices.
>In a stationary economy, the reflux from these costs is equal to A+B. JCT: I have no idea what you mean by reflux if somehow your A+B costs don't end up as A+B prices.
>If rate of flow of total--not per unit--costs as represented by A+B >disbursements are increasing, as would be the case for example for an >evenly rotating economy that is growing quantitatively, the >instantaneous reflux from A+B must by necessity be less than A+B. The >difference is always bridged by credit of one form or another. JCT: I still don't know what you mean by reflux though my whole point is that LETS always provides enough new credit to bridge any gap.
>Effective demand then is the reflux from A_B plus credit. JCT: I still don't know what you mean by reflux and I don't know what you mean by A_B plus credit. I would have assumed that A, the money issued into circulation via wages, dividends, etc, + Credit, the money issued into circulation via new loans, equals the effective demand. But I have no idea what A_B+Credit means.
>>>3. WBR: There is no imbalance caused by interest. The banker is not >>>only a banker, he is a businessman. "Interest" is merely the name >>>given to his gross profit, and in this respect does not differ in >>>any substantive way from the gross profit received by any >>>businessman. From his profit he pays his expenses, dividends to his >>>stockholders, and a salary to himself. >>JCT: This is the standard cover story for interest with which I >>disagree. Even Douglas includes interest in his imbalancing factors. >>Now you're saying it doesn't, while arguing that the others I say do >>not imbalance the system still do? >In reply: There is never an actual imbalance, except in the special >case of a credit contraction. JCT: Notice that the banker who is a businessman makes a gross profit if he levies service charges too, with which to pay his expenses, etc. Just because a usury banker uses his profits the same way a LETS service charge banker does not detract from the fact that there is a difference in how the players must play the economic game. And even in the case where there is no credit contraction, there is still the imbalance demonstrated in the Interest Island game which I see you still haven't tested out.
>A+B always equals the reflux from A+B, + credit in any monetary >production economy where goods and services are sold through >markets. JCT: Okay, I assume that the above A_B+credit really means A+B+credit and now it really doesn't make sense. Major Douglas has always used to B to represent the gap in purchasing power that we don't have for which social credit is added in the numerator to balance the B.
>The question becomes who will control this credit, and to whose >benefit is it to be controlled. The answer will determine the course >and direction of future production, and the very substance of >civilization. JCT: The answer is that in a LETS, no one controls the credit. LETS provides all the credit that is ever needed.
>Credit can be insufficient, misdirected or excessive in terms of the >greater good if not regulated and distributed in harmony to >scientific principles. JCT: With a LETS bank, credit is never insufficient. It may misdirected but the borrower will have to pay for his mistake. And it's never excessive. The whole point in all the LETS news reports is that it is regulated and distributed in harmony with scientific principles for the greater good.
>There is no naturally occurring automatic mechanism that can do so in >the absence of conscious control. JCT: LETS manages quite easily to do just that.
>>4. JCT: I'm truly amazed that after my explanation of the "major" >>difference between interest and service charges... that you still >>don't see the different effects on borrowers. You either haven't >>read the Interest Island vs. Service Charge Island example or you >>shouldn't be debating with me. >In reply: This is really a rather trivial fallacy, the existence of >the general class of which was forcefully demonstrated by Zeno 2500 >years ago in his famous paradox of Achilles and the tortoise. JCT: I might believe you if you only provided some evidence of a logical explanation but an opinion from on high just wont' do.
>It is not possible to meaningfully analyze dynamic processes, which >are continuous in time, by segmenting periods and quantities. JCT: Engineers do it all the time. It's called calculus where we take the dynamic processes down to their infinitely small periods and quantities. They teach us this in first year math. And then they teach us to handle the dynamic processes with differential equations though throughout all your discussions of rates of flows, you haven't used a differential equation once. Even Douglas used differential equations to prove that banks create the money when they make loans but I've never seen any other Social Credit differential equations. By the say, the LETS differential equation is dB/dt=0. What's your social credit differential equation. And the LETS system Laplace Transform equation is 1/s. Do you even know what the Social Credit Laplace Transform is? I do.
>Zeno "proved" that Achilles will never catch up to the tortoise. It >would be just as easy to "prove" the converse--that if it is Achilles >who is given the head start, the tortoise cannot fail to catch up. >All such "proofs" are by their very nature fallacious and ridiculous. JCT: I notice you ducked the issue of the difference between the effects of interest and service charges on the participants in the game. May I assume that you still hold that there is none? I gave you two game theoretic examples that you could have tried and to failure to distinguish the difference between the two on the fact that my "proof" is fallacious and ridiculous misses the point. I made no proof. I only gave you two examples to test and draw your own conclusions. Perhaps you'd like to explain just what exactly it is about my two examples that's fallacious or ridiculous. Or is it simply the use of game theory that you find so?
>So you have "proven" that 10 cannot repay 11. Do you want me to >"prove" the opposite? I will be glad to do so. I will also make an >elephant disappear, the reappear. I will saw a woman in half, then >recombine her. JCT: Yes, I say you can't pay 11 with only 10. You say you can. No wonder we don't make any sense to each other. Though I would like to meet your wife or any of your pets. Before you answer though, I'd like to know if there's anybody else reading this who understands what you've said in this article and would like to try to explain it to me. As a simple systems engineer who just can't see how you'll pay 11 when the banks only printed 10, I know I didn't understand how. But you sure do sound impressive and I'd certainly like to hear you explain how you'll do what my Quebec Socred grandfather and I never could figure out. But give a couple of days for someone else to try to interpret. -------------------------------
A Social Credit Debate among Friends #5
>Date: Wed May 5 02:34:28 1999 >From: email@example.com ("Charles Michael") >Subject: Re: [lets] TURMEL: A Social Credit Debate among Friends #3 >To: firstname.lastname@example.org, onelist. >Hi All, Thought I'd throw in a few thoughts below. Since I find it >hard to follow what's new on these reposted debates, I will take the >liberty of capitalizing my own responses for ease of viewing - not in >order to "shout" or be rude. Thanks, Charlie Michael In Denver JCT: Charles, please lose the capital letters. I'd heard that they were harder to read and now see why. They fill up too much space and really are harder to read.
>>JCT: I don't like negative interest rates or "demurrage charges" >>because they introduce a negative feedback loop which must be >>compensated for too. 1/s is the best control system, not 1/(s-i) or >>1/(s+i). Like Buddha, Nehemiah, Mohammed, and Christ command: "Let >>the exacting of usury stop." Let not the debtors nor the creditors >>be punished for using the tokens. >PERHAPS THE DIFFERENCE BETWEEN USURY AND DEMURRAGE IS THAT THE LATTER >WOULD LIKELY BE IN THE FORM OF A TAX WHICH COULD THEN BE IMMEDIATELY >REDISTRIBUTED ON AN EQUITABLE BASIS BACK TO THE POPULATION AT LARGE >WHEREAS POSITIVE INTEREST USURY GETS STUFFED INTO RICH PEOPLE'S >POCKETS. JCT: I repeat that there is no valid reason to take from the hard working to give to the less hard working. Borrowing the abundance the hard-working aren't using right now and lending to the poorer gets the job done without all the bookkeeping to account for the feedback. There's a great engineering acronym, KISS, Keep It Simple Stupid, which I live by. If it can be done without any need to supervise and regulate any feedback loops, then keep is simple. This was not meant to offend, it is a well-known term in engineering.
>>>it would be CDN$16,666.66 or>$1388/month. This is the National >>>Dividend, of course, and would instantly abolish poverty and all >>>its ills overnight. >I ASSUME THAT THIS $400 BILLION FIGURE REPRESENTS INTEREST ON ALL >DEBT AND NOT JUST PUBLIC GOVERNMENT DEBT. IF SO, THEN I ASSUME THAT >THE INTEREST SAVINGS THAT ACCRUE TO THE NONGOVERNMENTAL SECTOR WOULD >BE RECAPTURED THROUGH TAXES IN ORDER TO FUND THE NATIONAL DIVIDEND >REDISTRIBUTION THAT IS BEING TALKED ABOUT? IS THIS CORRECT OR AM I >MISSING SOMETHING? JCT: Good point. I was going to change my LETS to the Queen poem to reflect the thousand per month per capita savings which I was going to suggest be allocated by the dividend. But collecting the interest we personally and corporately pay to add it to the interest the government pays is useless work and I'm going to leave my poem the way it was. The Dividend should be the $500 a month that the government will save and the personal and corporate interest saved can be saved directly by the people and corporations themselves. So abolishing interest would allow the use of the government's debt service to be given to the people as a dividend which can then be added to the other $500 on average they won't have to pay in personal debt service or in high costs to corporations who no longer will have to pay it either. I'm glad you caught it point now. I was just going to change the poem and now I don't have to. I should find some way to indicate though that not only will people receive $500 in dividends from the tax budget slated for interest but they will also save another $500 a month from the personal and corporate costs they now no longer will have to pay. >>It's the concept of linking the number of tokens to collateral >>that economists just can't seem to grasp. They've been conditioned >>to believe that any increase in the money is inflationary when it's >>obvious to any gambler that new chips in the game really means new >>matching wealth pledged to the cage. >I AM STILL ONE OF THEM DUMB ECONOMISTS (SORT OF) WHO CANNOT SEE THE >LOGIC OF HOW BASING INTEREST FREE LENDING ON COLLATERAL IS GOING TO >AVOID PROLONGED WIDESPREAD INFLATION - ESP IF EACH NEW LOAN IS NEWLY >CREATED MONEY. JCT: Think about that statement again. A casino bank bases it's interest-free lending of chips on collateral and those chips never lose the value in the cage that they're based on. There can be no inflation when interest is zero as predicted by the Miracle Equation: Inflation J = I/(P+I). If I=0, J=0.
>REMOVING USURY IS GOING TO DOUBLE OR TRIPLE THE BUYING >POWER OF EVERYONE. LOW INCOME FOLKS CURRENTLY PRICED OUT OF THE >HOME-OWNERSHIP MARKET BY USURY HAVE TO CONTENT THEMSELVES WITH (SAY) >A SMALL APARTMENT. ABSENT USURY, THAY CAN AFFORD PAYMENTS ON A >MORTGAGE FOR PERHAPS A CONDO OR A SMALL HOUSE. QUITE A STEP UP! BUT, >WHEN MILLIONS ARE SIMULTANEOUSLY THUS EMPOWERED, DEMAND WILL EXCEED >SUPPLY FOR SOME TIME UNTIL NEW PLANT & EQUIPMENT CAN BE BUILT AND PUT >INTO SERVICE TO MEET THAT DEMAND. JCT: Right now, there already is the collateral backing up our money. It just happens to all be owned by the same few people. Without changing anything, it just means that the ownership of all that collateral will be shared by all. Just because everyone now gets to own more doesn't mean there's inflation, it just means that the rich who can't even use all they own won't own that much anymore. And we went into the natural limits on the time currencies in the Consequences of Money at http://turmelpress.com/conseq.htm. The money doesn't get taken out into circulation by purchasers until the collateral is produced and they then buy it. Not before. And even if they pay in advance of the order, there is still the manufacturers promise to back it up as the collateral in the cage. And if they don't pay in advance, then the manufacturers borrow to pay for it as it's produced and then collect the currency from the buyer on the sale to then retire their own production debt. Do you see my point? If the manufacturers only take out credit as the collateral is produced, then the collateral matches the credits. If the purchaser takes out the credit in advance of the production, the IOU for production matches the credits. Either way, whether credits issued upon production or upon purchase of promised production, there is no way for any credits to be issued in excess of the potential production.
>THE SAME WILL OCCUR IN THE MARKETS FOR BOATS, CARS, FRISBEES ETC. >THUS A GENERAL INFLATION ACCOMPANIED BY A BURST IN THE MONEY SUPPLY. JCT: Sure manufacturers will sense a bidding up of prices but they will also be faced with a major reduction in their costs of production. No more interest expense. I think they will be well able to make substantial profits without having to overcharge and if the market chooses to bid up the prices for their services, then the market believes that their services are really worth it. And if some idiot wants to overspend the Hours he is going to owe, then that's his problem. Yet, all these loans are the collateralized ones for capital goods. We're not even talking about uncollateralized loans for smaller goods and services. And remember finally that everyone with the opportunity for a job benefits from the save upward valuation of their services so it will tend to cancel out. We are after all paying ourselves.
>EVEN IF EVERY NEW LOAN IS COLLATERALIZED, EACH HOME SELLER, CAR >DEALER AND FRISBEE RETAILER WILL KNOW THERE IS A HUGE INCREASE IN THE >NUMBER OF POTENTIAL BUYERS SO HE WILL JACK UP HIS PRICE AND LET THE >HIGHEST BIDDER AMONGST THAT NEW THRONG OF BUYERS BE THE ONE TO >ACTUALLY GET A COLLATERALIZED LOAN. JCT: And as long as it's sold for Hours the buyer is willing to return to the system, and since that upward profit is generally distributed to all workers, then that is how capitalism works not to the detriment of anyone.
>THUS, EVEN IF ONLY ONE PERSON AT THE "AUCTION" GETS THE HOUSE OR >CAR, THE PRESENCE OF ALL THE OTHER NEW BIDDERS WILL LEAD TO >INFLATION IN THE PRICE OF THE GOODS OR SERVICES DEMANDED. AND >VIRTUALLY ALL GOODS AND SERVICES WILL BE SUBJECT TO THIS BURST IN >DEMAND. JCT: After the reduction in prices due to the reduction in interest expenses, it may well still lead to an increase in prices but that's what a free market is all about. And remember, The Engineer doesn't define inflation as a rise in the prices as Economics does, I define inflation as an unnatural reduction in purchasing power. Getting nothing for my hard earned time. If I choose to bid more Hours for my house than the next guy, I'm getting housing for my time. Only when I'm paying my time for interest do I get nothing for my money.
>JOHN OFTEN POINTS OUT THAT, NO MATTER HOW MANY PEOPLE EXCHANGE >COLLATERAL FOR CHIPS AT HIS FAVORITE CASINO HANGOUTS, THERE IS NO >INFLATION IN THAT CASINO CURRENCY. BUT THAT IS NOT A VALID >COMPARISON. >IN A NATIONAL OR GLOBAL LETS, WHEN USURY IS ABOLISHED, THE CONSUMERS >MENTIONED ABOVE EXPERIENCE A DOUBLING OF THEIR BIDDING POWER IN A >CLOSED ECONOMY. JCT: I would rather call it buying power rather than bidding power. And on average for the group, the consumers experience no increase in their bidding power. The rich always controlled most of the buying power while the poor controlled almost none. That the poor now experience a doubling of their buying power comes from the rich who don't need a doubling and won't even feel a halving of it.
>HOUSE AND CAR BUILDERS CANNOT IMPORT LABOR AND MATERIALS FROM MARS >TO RELIEVE THE SHORTAGES THAT RESULT FROM THE POST-USURY CONSUMPTION >BOOM. A CASINO, ON THE OTHER HAND, IS A SMALL SUBSECTOR OR THAT >BROADER CLOSED ECONOMY. IF IT SUDDENLY EXPERIENCES A DOULBLING OF >DEMAND FOR (COLLATERALIZED) CHIPS AND ALL THE SERVICES THOSE CHIPS >CAN COMMAND, THEN MR. CASINO MANAGER CAN (SO TO SPEAK)BRING IN HELP >FROM MARS. THEY CAN ADVERTISE FAR AND WIDE FOR DEALERS, WAITRESSES, >GAMBLING TABLE CARPENTERS ETC AND EXPAND THEIR OPERATIONS TO MEET >THE NEW DEMAND. JCT: The chips aren't demand for staff and tables, the chips are demand for the collateral in the cage. Though it is true that the explosion in consumer demand will use up all idle assets and people, there is the natural limit. But the demand is for the production that is there in cage, not for excess demand that can't be delivered.
>IF, ON THE OTHER HAND, THE CASINO WERE A CLOSED ECONOMY WITH ALL >AVAILABLE STAFF AND CARPENTERS SLEEPING IN THE BASEMENT, THEN A >DOUBLING OF DEMAND WOULD BUMP UP AGAINST ALL THOSE FIXED CONSTRAINTS >AND WAGES AND PRICES WOULD START TO SPIRAL UPWARD BECAUSE THERE >WOULD BE A DOUBLED AMOUNT OF CHIPS CHASING ESSENTIALLY A FIXED >SUPPLY OF LABOR AND MATERIALS. JCT: And the casino could then raise its prices until the demand falls off to meet its natural limit. Believe me, if the Taj Mahal Poker room had a dozen people waiting on the list for every game in the room, they would raise their rake-off rate until the demand fell to what they could provide. Again, this is simply capitalism. But keep in mind that the chips issued are always backed up by something in the cage and there can be no explosion in demand without an equivalent explosion in production. Demand follows production as opposed to production following the demand bank's may allow by granting loans. See http://turmelpress.com/watch80.htm for Social Crediter Louis Even's stationary engineer example to see this process demonstrated quite elegantly.
>>JCT: In a LETS, their physical manpower is the basis for their >>credit. LETS is not controlled by any wealth interests and LETS will >>not refuse to extend credit based on manpower. That's it's greatest >>feature. >DOES THIS MEAN, JOHN THAT YOU WOULD ALLOW LOANS TO PEOPLE BASED UPON >THEIR EARNING POWER, GOOD CREDIT RECORD AND A PROMISE TO PAY EVEN IF >NO PHYSICAL COLLATERAL IS AVAILABLE? JCT: Yes. Manpower is now the sole basis for credit in a LETS. I've been urging them to accept collateral which is good enough for the banks but they haven't caught on yet. But they inevitably must. If bankers value collateral above manpower, how silly can it be to accept the value of manpower but then fail to also accept the value of collateral?
>>>Suppose however, that the majority of people can't afford their own >>>land and wages are too low to generate the required money. This >>>situation would be quickly rectified by the voting members. First, >>>a vote would take place to increase the MUDL. The liquidity would >>>then be used to buy land and tools required to feed and house the >>>all interested people. >> JCT: Makes my point about LETS. >ON THE ISSUE OF DEMOCRACY I HAVE TO SIDE WITH JOHN. I DO SO BECAUSE >OF A DIMMER VIEW OF HUMAN NATURE. PAUL HAS SPOKEN OF CORRUPTION AND >DEMOCRACY IN THE UNLIMITED CREATION OF MONEY WILL, IMHOP, CORRUPT THE >ENTIRE POPULATION JUST AS IT DOES THE CURRENT BANKING ELITE. >IN THE US, WE ARE IN A MULTIYEAR BOOM. THERE ARE PEOPLE HERE WHO MAKE >$150K PER YEAR AND YET THEY LIVE LITERALLY FROM PAYCHECK TO PAYCHECK. >WHY? BECAUSE THEY INSIST ON LIVING IN $300K PALACES, EVERY MEMBER OF >THE HOUSEHOLD HAS A $30K SUV, THERE ARE BOATS, HORSES STABLED IN THE >COUNTRY, A CONDO IN COZUMEL ETC. ALL FINANCED WITH USURY DEBT. IF YOU >TOOK AWAY USURY, THEY WOULD BUY HOUSES, CARS, BOATS ETC THAT ARE >TWICE AS BIG AND EXPPENSIVE AND WOULD SOON BE BACK INTO HAND-TO-MOUTH >FINANCES AGAIN. JCT: I see nothing wrong with people spending all that they earn if they wish though I still think most people would save some of their doubled purchasing power. The only difference is that living on the edge won't cause any extra loss should one have to go negative for awhile.
>ASIDE FROM THE MEGA RICH, MOST OF THE LESS-WEALTHY POPULATION ALSO >LIVES HAND-TO-MOUTH AND, ABSENT USURY, MOST WOULD QUICKLY DOUBLE >THEIR CONSUMPTION LEVELS TILL THEY ARE RIGHT BACK WHERE THEY STARTED >FROM. JCT: Once you've doubled your consumption, you're not back where you started from. You're twice better off. That's why I think most people would choose to put a little aside.
>PUT THE POPULATION IN CONTROL OF INTEREST FREE NONCOLLATERALIZED LOAN >LIMITS AND GET READY TO WATCH LOAN LIMITS SPIRAL PAST THE MOON. JCT: Again, see the Consequences of money to see why people won't bid more hours of their future time carelessly.
>THE RESULTING INFLATION CAN, OF COURSE, BE BLAMED ON ARABS OR GREEDY >CORPORATIONS ETC. I BELIEVE A MONETARY SYSTEM NEEDS SOME >HARD-TO-CHANGE MINIMAL RULES TO KEEP THE SYSTEM STABLE. I AM NOT AN >ENGINEER, JUST AN ANTIDEMOCRATIC ELITIST I GUESS. :) JCT: You don't need any such rules if the system is stable to start with. Even though poor people have been granted access to LETS credit where they can't get any regular credit at all, no inflation in prices of the Hours has been detected and none should ever be.
>Date: Wed May 5 13:17:19 1999 >From: email@example.com (Paul Dumais) >Subject: [lets] Response to Charles Michael > >>ON THE ISSUE OF DEMOCRACY I HAVE TO SIDE WITH JOHN. I DO SO BECAUSE >>OF A DIMMER VIEW OF HUMAN NATURE. PAUL HAS SPOKEN OF CORRUPTION AND >>DEMOCRACY IN THE UNLIMITED CREATION OF MONEY WILL, IMHOP, CORRUPT >>THE ENTIRE POPULATION JUST AS IT DOES THE CURRENT BANKING ELITE. >I have run into many people who are leary of democracy who use >similar arguments. I think it comes down to an irrational fear of >poor people. It is a fact that the average Canadian is 25 times >richer than the average inhabitant on planet earth. The average >American is probably richer. Everyone participating on this list is >probably on average 50 times richer than the average world citizen. I >think many of us realize this. We have always feared poor people >because they appear desperate and many of us think they are poor >because they are stupid. JCT: But now we know that they are poor because the system always automatically demands foreclosure on a fraction of the borrowers for no good reason. So though many people may think this, we know the real reason why they are kept poor. >Many people feel that real democracy will result in chaos. I think >all of these fears are unrealistic. If you don't have democracy you >have slavery and corruption. You can't have slavery or corruption >with a true democracy. Who would we take advantage of? Ourselves? >Would we vote ourselves into slavery? JCT: People regularly vote for the major parties financed by the banks to keep them in slavery by legislating allowable interest rate laws.
>These are ludicrous ideas. People who are opposed to democracy >should admit: "I work far less than the average person and enjoy far >more luxuries than the average person. I am afraid that democracy >will change the elite position that I currently enjoy on this planet. JCT: But of course, we know that lending the abundance of the rich to the poor won't do that. We're not asking the rich for anything they need. We're only asking the rich for the loan of what they can't use at the moment with the promise to return it anytime they need it.
>It's too bad that there are billions of people far worse off than I >am. It's probably their own fault anyway for not being as smart as >me." Here are two visions of a real democracy. Yours probably goes >something like this (please correct me if I've gone astray): Everyone >is given the power of direct democracy over political and economic >affairs. Soon the vast majorities of poor people vote to increase >their Uncollateralized Dept Limit (UDL). JCT: Stop saying that. If they raise their limit, it has to be because some things remain unsold and unused. They can't use credit if there's nothing to buy. Only when there's something to buy will their credit cards be used. So any raising of the credit limit will only occur if such a raising will benefit everyone. Remember, I, myself, don't think we even need credit limits. The natural limit we discussed in the Consequences should keep credit within reasonable bounds. And the kid who needs all the major operations won't be denied though there's the chance he'll end up dying in the negative and we'll all have to chip in at that time.
>Inflation results because there are a lot of deperate needy people >out there who need money. JCT: The equation for inflation J=I/(P+I) does not show needy people who need money as a factor. People who need money are a result.
>In this way the majority of planet earth has become corrupt because >they are voting dollars into their pocket which they have not earned. >Utter chaos results because the money becomes devalued and barely of >any use. People starve because they are too stupid or greedy to >moderate themselves. JCT: I'm at a loss to understand how the poor vote dollars into their pockets which they have not earned.
>Here's my vision: It starts out the same. The vast majority of poor >people will vote to increase the UDL. Inflation will result as long >as the demand for spending is increased over the demand to earn. So >inflation might result initially. However, when people try increasing >the UDL too much or too often, they will realize that fewer and fewer >people will want to accept money in return for services. This will >cause inflation and a stagnant economy. We will know imediately what >caused this and public opinion will result in a curbing of the UDL >increases. Once a stable UDL value is found, the rich will get richer >as usual and everyone will have incentive to provide services in >return for the stable democratic currency. JCT: The rich may still get richer but so will the poor. That's the difference. Now, interest takes from the poor to make the rich richer. If that theft is abolished, any extra riches gained by anyone will have been won fair and square. Once again, the problems raised are based on the assumption that expanding the credit limits of the poor will result in inflation. This will not occur.
>The whole of human potential on this planet will be harnessed with >the power of the global democratic currency. We cannot vote for our >own demise as long as we have the ability to communicate with each >other. JCT: Every time the electorate votes in one of the bank-sponsored parties, they have voted for their demise through their own slavery.
>The beauty about democracy is that if the majority of people think >like you do, then we will have just the system that you envision. If >you want the minority opinion to rule, then you must decide which >minority is more right. JCT: I don't mind the majority ruling but I don't see how the majority ruling ends up in a minority opinion ruling.
>What if another monority decided it was more right. Would you be OK >if another rightious minority disagreed with you and forced you to >comply with their edicts? Anyone who's antidemocratic must be pro >enslavement of the majority by a minority even if they might by >chance be part of the enslaved majority. Are you really such a >person? JCT: Other than the odd dictatorship, I don't know anyone who's opposed to democracy. Other than those dictatorships, most nations think that they're doing their best at being democratic. I don't see any opposition to democracy as a factor anywhere and so I don't see how arguing for democracy when everyone already agrees that they want democracy is going accomplish anything new. Unless you have some new kind of democracy not now being used by the democratic nations of the world.
>Another good reason to support democracy is that it forces us to >inform each other. If I felt I was part of a rightious minority >(which I do quite often), I am forced to "educate" the masses about >my opinion. The better job I do of this, the less likely I will be a >victim of mob rule. I still defend the democratic rights of mobs >depite the possibility that my wisdom will not be heeded. I defend >these rights because I'm confident that such a democracy is necessary >to allow us to evolve as a society. I'm also confident that others >will take the time to educate the masses to wise ways of living and >the average person will feel more responsibility since thier vote >actually has an effect. JCT: You live in a so-called democracy. What do you want to change about it to make it more democratic and fulfill all these benefits our democracies are not now delivering?
>It would be interesting to take a vote as to who believes majority >should rule or who believes a rightious minority should rule. JCT: I don't think anyone would vote for the minority rule. What kind of people would you expect to vote for minority rule?
>If you belong to the latter, who decides who rules? What if you >become a part of a rightoius minority who is ruled over by a >different rightious minority? JCT: Again, no one has advocated minority rule. No one even knows of any minority rule other than that which you have assumed. This constant criticism of minority rule where there is very little minority rule, especially in the democratic nations we live in, isn't making a point. No one disagrees with you. We all want democracy. But since we've already got it, how is suggesting democracy going to help?
>Is that OK? Isn't that slavery no matter which minority you belong >to. Wouldn't anyone rather risk having the mobs make a few poor >decisions in exchange for eliminating slavery for all time? JCT: Isn't that we have? Doesn't the majority mob rule? But it hasn't eliminated the slavery, has it? The slavery is a slavery of debts. When someone works and doesn't get the fruits of his labor, that's slavery. We have the fruits of our labor stolen from us on a regular basis. Remember Adelard's Axiom #2: "Interest is theft." So interest is the slavery device and democracy hasn't yet changed that. So the issue of abolishing slavery is not a function of democracy though democracy is a potent weapon in the war against such slavery.
>In this way much more importance is placed on communicating >with our brothers and sisters so that we govern ourselves best. JCT: Many political parties have loads of programs on how we should rule ourselves. But none on how we should save ourselves. Being democratically enslaved by our debts is just as oppressive as being undemocratically enslaved by our debts. The only democracy we need is economic democracy. And that that can only occur when everyone can vote with their dollars.
>>IN THE US, WE ARE IN A MULTIYEAR BOOM. THERE ARE PEOPLE HERE WHO >>MAKE $150K PER YEAR AND YET THEY LIVE LITERALLY FROM PAYCHECK TO >>PAYCHECK. WHY? BECAUSE THEY INSIST ON LIVING IN $300K PALACES, EVERY >>MEMBER OF THE HOUSEHOLD HAS A $30K SUV, THERE ARE BOATS, HORSES >>STABLED IN THE COUNTRY, A CONDO IN COZUMEL ETC. >I have a suspicion that the average American (though rich compared to >other world citizens) would disagree with the idea of being in a >boom. I really think this is a media perspective generated by wealthy >coorporations and bought politicians. If we asked the average >American what he though, we would get a picture of someone earning >less and working more than ever. JCT: That's right. The majority of people live paycheck to paycheck. Democratically.
>>GET READY TO WATCH LOAN LIMITS SPIRAL PAST THE MOON. THE RESULTING >>INFLATION CAN, OF COURSE, BE BLAMED ON ARABS OR GREEDY CORPORATIONS. >>I BELIEVE A MONETARY SYSTEM NEEDS SOME HARD-TO-CHANGE MINIMAL RULES >>TO KEEP THE SYSTEM STABLE. I AM NOT AN ENGINEER, JUST AN >>ANTIDEMOCRATIC ELITIST I GUESS. :) >Too much consumption in general is a problem that will have to be >addressed. JCT: We can't consume too much. We can only consume to our natural appetites. Not even Rockefeller can live in all the homes and apartment building he owns. Just like we can't live beyond our physical means. We can only live up to our physical means. Consuming too much and living beyond our means are purely financial considerations, not physical ones.
>However, every indication is that the powerful elite who are in >control (undemocratically) are less interested in protecting >the environment than the average world citizen. JCT: Actually, in most nations, they are in control quite democratically. With their money, they support the politicians who do their bidding. When everyone has access to credit, then everyone will be able to support the politicians who do our bidding. But their control is undoubtedly democratic within the limits imposed upon them. One group of rich guys backs one candidate who democratically opposes the candidate backed by the other group of rich guys. Do you not see that when candidates are backed by "all guys" and not just the rich guys, then true democracy will reign?
>As to your comment about UDL's skyrocketing, as I stated above, I >don't think this will happen. I don't think people will want to print >useless money. JCT: Actually, I don't think people will want to print up more of their own IOUs than they're ready to work to pay back. Their Hour IOUs are never useless. They always represent time owed.
>Raising the UDL gives everyone money in thier pockets (not a select >few). I don't think it would be hard for people to understand that >if you gave everyone limitless amounts of money that no one would >want to earn it. JCT: Where in the notion of "Social Credit" does it imply that anyone is being "given limitless money?" The notion is that everyone might be given limitless credit for Hours pledged. If the sickly child uses thousands of hours worth of operations and ends up with a very high negative credit, he may die with a commitment to his society he'll never be able to repay. But there will be many millions more who will die in the positive with commitments from their society they'll never need to use. I'm sure more will die in the positive than in the negative so balancing the books should always end up profitable to society as a whole.
>Raising the limit too much would render the money useless. JCT: Again, you're missing the point that it's a credit limit, not a gift limit. The money representing an Hour of owed labor can never be rendered useless.
>Why would voters allow that? I'm quite sure voters want a useful >currency. I don't think the mobs are that stupid. But maybe you do? JCT: But an Hour of time is intrinsically useful. Nothing, not even the stupidity of a mob can change that.
>I think that the idea that the majority of the world's population is >hopelessly stupid must be the basis of any anti-democratic notions. JCT: Again, I don't know anybody at all with any of these decried anti-democratic notions.
>Even if I thought the majority of people were stupid, I would treat >them like I would a son or daughter. I would give them the tools and >skills to educate themselves for the benefit of all humanity. JCT: And I would have the storehouse lend them those tools and make them pay them back. Giving is charity and entails all the bad effects of charity. Most governments either lend money at interest to people in business or give it to them when they're broke. They never consider the advantages of the middle ground. Lend it to them interest free with the requirement that they try to pay it back.
>I would not sell them to a slave trader as you seem to advocate. JCT: No one I know has advocated selling anyone to slave traders.
>Would you tell your daughter: "Sorry honey, it's better for all of >us if we sold you into slavery. You're too stupid and we can't allow >your one vote to take power away from those who know better. I could >send you to school, but you still might not learn how to live >properly and you might vote the wrong way. >Can't you see how this is better for everyone?" Paul Dumais JCT: Of course every can see how no slavery is better and democracy is better. And since no one is advocating non-democracy, why are we talking about democracy as a solution to anything?
>Date: Wed May 5 14:31:07 1999 >From: firstname.lastname@example.org ("Charles Michael") >Subject: Re: [lets] Response to Charles Michael >Thank you Paul, for your considered and obviously heartfelt response. >No, I am not one who believes in the tyranny of the elite minority. >In fact, I would go beyond the monetary reform ideas that are the >topic of this forum and move toward wider control by workers and >customers of the really large corporations, utilities etc. This would >truly empower people. I was glad to see John mention this as one side >benefit to his reform proposal. JCT: And the only way to do that is to give the workers their own credit lines which they can pool and buy all the shares of their own companies and then benefit of the fruits of their own labors, rather than just have a few rich guys get access to bank credit, buy all the shares and pay the wage slaves the minimum while retaining all the profits for themselves.
>As for my dim views about human nature expressed below, actually it >was not poor people I had in mind at all when I was writing it. I had >in mind the middle class (my neighbors) and the "new rich" whom I >described at length. I do so based not upon an abstract idealogy >about human nature but based upon my 43 years of observation on how >people in the rich countries behave over and over and over again. >The "greed mania" and arrogance that typify today's boomtime America >is just one current example. Even one's barber obssesses continually >about his mutual funds and how he expects the market to rise 20% per >year until he can retire at 45 with a million dollars. JCT: Sure they've all been conditioned to look for the free ride. Get a pile of money and let your money do your work for you. But money does no work, it enslaves the poor guy who does the work and hands the value of his production over to you. But yes, everyone has been conditioned to dream of the big pile of cash that then "earns" a paycheck they don't have to. Too bad.
>The deeply poor, by contrast, are not obssessed with the notion that >they have a "right" to an exponentially unlimited expanding standard >of affluence (unless, of course, they have been exposed to a lot of >TV). They will likely be happy to settle for modest constraints that >will still see their standard of living rise manyfold. JCT: And I'd also add the middle class who are just as shackled to their mortgage payments as the poor are to their rent payments.
>And finally, I DO NOT advocate "slavery in any form. With all due >respect, you seem to have the notion that anyone who doesn't agree >with all details of your theories is a closet Hitler. I agree, with >reservations, with John's notions of reform and I believe his >arguments in defence of it make clear that, even with a few >"engineering" rules imposed from above, the life and freedoms of all >people will be gigantically improved. Anyway, thats it for now. Keep >up the great work, everyone. This is a good debate. Thanks, Charlie JCT: There is only one rule imposed from above. No more genocide of the poor by usury. No more theft from the poor of their life- support tickets through mort-gage death-gamble usury. Other than that one rule imposed from the top on the robot cashiers, I have no other rules I want imposed.
>Date: Wed May 5 16:18:03 1999 >From: email@example.com (Paul Dumais) >Subject: Re: [lets] Response to Charles Michael >Charles Michael wrote: >>In fact, I would go beyond the monetary reform ideas that are the >>topic of this forum and move toward wider control by workers and >>customers of the really large corporations, utilities etc. This >>would truly empower people. I was glad to see John mention this as >>one side benefit to his reform proposal. >I'm glad that you think this way. Sorry if I made it sound like you >were pro tyranny :-). JCT: None of us are. But if you want to call those of us who insist that there will be no more stealing of the life-support tickets of the poor tyrants, then so be it. But I think it's an unfair adjective for our aims.
>>The "greed mania" and arrogance that typify today's boomtime America >>is just one current example. Even one's barber obsesses continually >>about his mutual funds and how he expects the market to rise 20% per >>year until he can retire at 45 with a million dollars. >This may be true of the new rich and middle classes. However, such >people who are inflicted with "greed mania" and arrogance should make >a minority on any scale (especially globally of coarse). The problem >we face is that the rich (I include middles classes here - who are >pro rich) exert power which is far out of proportion with the one >person one vote ideology of democracy. I tentatively agree with your >above statement. JCT: That's right. The corruption of democracy is not that we don't have one man one vote, it's that also included in the equation is that the vote of one man's cash supersedes the vote of one man's "no-cash."
>>The deeply poor will likely be happy to settle for modest >>constraints that will still see their standard of living rise >>manyfold. >My point is that the poor, who are in the vast majority, should be >able to choose these "modest" constraints. Sure they may be happy >with what changes they get, and I wouldn't blame them. However, I >can't think of any reason why everyone should not decide on every >aspect of their governance. JCT: There'll hardly be any governance left once money is fixed other than where to put the bridge.
>>I agree, with reservations, with John's notions of reform and I >>believe his arguments in defence of it make clear that, even with a >>few "engineering" rules imposed from above, the life and freedoms of >>all people will be gigantically improved. >I disagree with rules being "imposed from above" in any way. All that >I ask is that you consider what that means. Who will decide on these >rules if it is not the majority? I suggest that if you choose an >elite minority to decide these rules, there is no way to stop the >same minority from making other such rules. JCT: No one wants to make up the rules from above. Everyone wants it democratically decided to stop the theft from the poor. How many times do I have to repeat Major Douglas's statement that policy should be democratically set but engineering should be autocratically set by those specialised in the field. You don't want everyone deciding how many beams to put in the arena roof even if the blame for its collapse can be democratically absorbed.
>I think I can propose something that will work. The direct democracy >movement proposes that the citezens should have control over every >aspect of their governance. Under such a scheme, a representative >government could be elected to take care of the day to day business, >but the citizens can change, initiate and remove any legislation as >they see fit. JCT: No one disputes this.
>If we hire a global currency engineer to administer our wishes, that >engineer would do as he sees fit (including setting or changing the >UDL). JCT: I disagree. That would be setting policy. That is not the function of the currency engineer. This currency engineer wants to be told the credit limit on the hours one can take out without collateral, I'll program it into the LETSystem software, and then I'll take my leave and go play Poker. Please look at Louis Even's Stationary Engineer example to grasp what is the autocratic responsibility of the engineer and what is not.
>However, under direct democracy, if the majority of citizens >wanted a higher UDL, they would show this by referendum. If the >referendum showed that a higher UDL was desired, the currency >engineer would have to comply or resign. JCT: No one disagrees with this. This is exactly the way it should be run. But once you've made that democratic decision and the engineer has programmed the robot's software to do it, please leave the robot alone.
>In this way we are not telling the engineer how to to his job every >day. JCT: You are not telling the engineer how to do his job ever. You tell the engineer what you you want his job to accomplish and then leave the engineering up to him.
>If the system fails after he is dismissed, his professional >integrity is intact and he would likely be rehired. If the system >prospered, he would not be rehired unless he regained the voters' >confidence. Is there a downside to this proposal? JCT: You bet there is a downside to telling the engineer how to do his job. He knows best the scientific principles necessary to get the job done. If the engineer disagrees with the number of beams you've decided you want in the roof and resigns, you deserve the results you get for mixing up policy setting with the engineering of the policy decided upon.
>JCT has maintained that telling the engineer what to do is not right. JCT: That's not what I'm saying. Telling the engineer what you want done is fine. It's telling the engineer how to do it that's none of democracy's concern. After all, if the majority were tired of an irritating minority, they'd be wise to tell the engineer to build the minority's arena in the way the majority want it built.
>We can tell the civil engineer where to put the bridge, but not how >to build it. I disagree. There are many examples of engineers being >hired and being told where to put the bridge and how many bricks to >use. The engineer does what he is told or finds another job. JCT: And anyone idiot enough to use other than the number of bricks scientifically determined by the engineer to be necessary deserve the calamity their silliness deserves.
>The engineer cannot put a stamp of approval on the design if he >doesn't think it's safe. However, the person with the money will >find an engineer who does (within reason of coarse). In this way the >person with the money is able to decide. JCT: And so the person with the money overrules the engineer with the scientific knowledge. Sounds like the Nasa engineers who were overruled by the economists when they knew the Shuttle O-ring seals were unsafe because they had good insurance policies. And they got exactly what they deserved. I don't think I can think of a better example of how this policy of the money boys overruling engineers usually ends up working. Rather not working.
>Similarly, it is the global citizens who own a global currency and it >is they who will have the final say in all aspects of the currency's >adminisatration as they see fit. If the currency engineer does not >listen to the people who hired him, he is fired and replaced by one >who does. JCT: And when it crashes due to its unsound engineering design, is it all okay because they voted on it?
>There is no safe way to impose "rules from above" without choosing a >minority to rule over the majority. JCT: Sorry but when the "rules from above" have been laid down by God in his natural laws, even a majority risks plenty when ignoring the minority project engineer's calculations.
>I believe you when you say that you do not advocate slavery in any >form. I commend you for that. However, that view seems to be >inconsistant with your view that rules should be "imposed from >above". JCT: You may find obeying God's Natural Law as determined by those educated in the principles of natural law slavery but I think it's a false notion. You could just as easily argue that the law against your murdering someone is enslaving your free will too.
>These rules can only be put in place via democracy. JCT: Not Natural rules. They're put in place by a power far greater than any democracy.
>Any other way is slavery (even if perhaps a mild form). If you have >another way of imposing these rules I would like to hear it. JCT: No. Being enslaved to God's natural laws suits me if that's the way you want to think about it. And evidently, letting the guys with the money overrule the engineers certainly eliminates that kind of slavery.
>I didn't mean for my comments to sound like you were a closet Hitler. >As far as I'm concerned you're a model citizen. I just want you to >understand how I feel that any vote against democracy is a vote for >slavery. JCT: And if you don't see why democracy should be restricting its input to policy and not sticking its nose into engineering, then you can bet I'm working to enslave you to a bridge that won't fall down.
>It is the responsibilty of an enlightened, elite and benevolent >minority (if such a thing exists) to educate the public so that its >views are used to govern the rest of us poor slobs rather then to >impose its views by any other way (read slavery or by force). JCT: If you persist in oppose God imposing his natural laws on you, you can bet he'll force you soon enough.
>>Anyway, thats it for now. Keep up the great work, everyone. This is >>a good debate. Thanks, Paul Dumais JCT: Actually, it's the first time I've ever had anyone argue that the democracy or the rich guy should tell the engineer how much cement to put in his bridge.
>Date: Wed May 5 16:37:12 1999 >From: bfowler@NetRevolution.com >Subject: [lets] Reply to Charles queries >Hi Charles: >Your first question was about my statement that in Canada the total >interest on all debt is about C$400 billion. This is total >government, corporate and personal debt. Corporate is about half the >total debt of C$4 trillion (about US $2.7 Trillion - that in North >American trillion, not UK trillion) >Yes, this C$400 billion is interest on the total Canadian debt, not >just government. >No, there is no need to tax back any corporate interest savings to >pay a National Dividend. JCT: Not if we want to give them a grand a month dividend. If we let them keep their personal and corporate interest payments, then the dividend can only be the interest that the government saves.
>The Bank of Canada issues the C$400 billion at ZERO interest to the >Federal Government. This is a huge amount of money, of course, and is >more than twice the total Federal Budget. JCT: Actually, since the debt is based on collateral, I'm in favor of the Bank of Canada issuing the whole $4 trillion to debtors with which to pay off and convert their interest-bearing bank debts into interest-free Bank of Canada debt so that all future payments pay down the principal and we're eventually out of debt.
>This is my current proposal as how this could be spent into the >economy: >1. C$100 billion is split 50/50 with the Provinces to pay down both >federal and provincial government debt by ceasing all borrowing and >paying off the debt as it comes due. Most of this money literally >disappears into thin air as the debt is cancelled. Certainly all that >goes to the banks disappears. JCT: So the interest-bearing debt is converted to interest-free debt at the Bank of Canada. But why convert so slowly. Why not the whole thing all at once. As you pointed out, the money would disappear in loan principal payments so nothing much would change except that we'd be left with interest-free debt.
>2. C$100 is used to abolish all federal and provincial sales tax and >a big reduction in income tax. This makes us more competitive with >the US and gives everyone more cash. Some will pay debt and others >will spend it. This boosts business and employment. >3. C$100 to be split between the feds, provinces and municipalities >to rebuild infrastructure and restore health and especially education >cutbacks over the past 10 years. This cuts unemployment tremendously >and boosts business again. >4.C$100 for a National Dividend of $1000/month for adults and >$500/month for children for the poorest 10,000,000 or 1/3rd of >population. >This will abolish poverty and all its ills. Most will be spent into >the economy. But some will go to pay personal debts. This vanishes >into nothing again. Again business gets a huge boost. This also >greatly reduces government costs for welfare, crime, violence and >soon. Many programs can be abolished. No homelessness... etc. >Business gets a huge increase in business, more profits that can pay >down debt. This again vanishes. >Perhaps a third of the money vanishes to pay debts. As debt is slowly >reduced to zero the total debt-free money is reduced as well. The >money in circulation only needs to be kept recycling back to >government to redeem the Zero Interest Bonds as they come due. This >sucks excess money out of the system as required. Any 'new' money >that is needed can be issued at will and spent into the economy thru >public works or Dividends. JCT: Now this is the Social Credit solution based on the the gap between the money in the numerator and the debt in the denominator. This would work. But once you've gone interest-free, there is no more gap and the government can't just spend money. It must borrow it like everyone else and then tax it back to pay it off.
>There will still be taxes on some things, such as tobacco, alcohol, >fossil fuels and pollution. Plus a tax on high incomes to prevent >concentration of wealth. Say 20% above $100,000 income. JCT: I don't like income taxes at all. I prefer an asset tax where the man with the most contributes the most and the man with the least contributes the least. But I don't want to deter everyone from accumulating concentrations of wealth. We are a capitalist system after all and I like the idea of being able to win more than the next guy.
>In regard to inflation, it is probably necessary to phase this in >over five years to allow time for production to gear up to meet this >'new' money on a one-to-one basis. Then inflation will be zero. It >is, of course, essential that the poorest be given the National >Dividend first for obvious reasons. This in NOT welfare, but a >Dividend on the total 'Common-wealth' of Canada. Regards, Baron Fowler JCT: Since inflation is generated by interest, your policy would not cause any inflation. It would simply be swapping the interest- bearing debt for interest-free debt which will eventually be paid off.
>Date: Wed May 5 15:41:43 1999 >From: firstname.lastname@example.org ("Alan Sloan") >Subject: Re: [lets] TURMEL: A Social Credit Debate among Friends #3 >I AM STILL ONE OF THEM DUMB ECONOMISTS (SORT OF) WHO CANNOT SEE THE >LOGIC OF HOW BASING INTEREST FREE LENDING ON COLLATERAL IS GOING >TO AVOID PROLONGED WIDESPREAD INFLATION. >An increase in the supply of money may well not be the result of >interest free loans...depending on the amount of lending on the >collateral, and the time limits on the loan period, the money in >circulation could be controlled just as it is now (they tell us) by >altering the interest rate. JCT: Alan, please, we're not worried about the quantity of money. It's not what generates inflation. And we certainly won't use interest rates to fight inflation. The big lie of economics is that interest fights inflation. Ask any business man if he raises or lowers his prices when the banks up his interest rates. I think you'll soon find out that he won't lower them or he won't be in business much longer.
>Date: Wed May 5 18:42:58 1999 >From: email@example.com (baron fowler) >Subject: Reply to Babylon Woes >To: firstname.lastname@example.org (John Turmel) >Hi John: >Just skimmed about half of the book on your site. Gad!!! That is a >lot of work there. Is this the entire book?? What an amazing story! JCT: I did qualify David Astle's "Babylonian Woe" as the very best book on the history of banking in antiquity I'd ever read but it's nice to hear you applaud him too. I met him in 1993. It is not the whole book but certainly represents a good 50% which I found worthwhile transcribing. I had posted these parts of the book to the email@example.com newsgroup before you joined so the others may have read it. I've since posted it to my web site at http://turmelpress.com/babyl00.htm. I only done commentaries on the first three chapters and can't wait to have the time to do more. I'd also recommend the excerpts from Carroll Quigley's "Tragedy and Hope" at http://turmelpress.com/quig00.htm, another great learning experience. I've only done a few commentaries on it too but there's tons of great information so far.
>There is also another amazing history of money by Davis from Wales. >He say money goes back 9000 years to cattle. >Seems that it goes back 23,000 years or more... JCT: Astle seems to indicate they were using money that long ago too.
>My comments: >Yes, God has a special place for the Rothchilds and Rockefellers. It >is called Karma. They will be given the opportunity to relive this >agony in their own life. Over and over until all the pain has been >experienced. Many of the abjectly poor from birth are previously >wealthy people. The doctrine of Reincarnation was also removed from >the Bible at the Council of Nicea in 531 AD on orders of Emperor >Justinian. There are, however, two remaining quotes by Jesus on >re-incarnation. This refers to the question about 'Who John the >Baptist is?' Jesus answered, 'Elias returned'. JCT: Maybe that would be fitting for how they've enslaved us. I prefer to think that the old saying "you can't take it with you," is wrong and "you do take it with you." So while people who leave this life unemcumbered with tons of savings their neighbors could have used do pass through the eye of the needle and their souls get to fly around the universe wondering in awe at God's creation. The Rothschilds and Rockefellers have to carry their tons of gold with them and do little flying. Adding salt to their wound, they have a large screen TV tuned into every famine and war they're responsible for so that not only are they chained to their pile of gold but get to hear the agonies they've inflicted on the planet's victims by their usury. And if I'm any judge of God, he must have an even more exquisite punishment planned for their greed.
>Re: Communists and the Tzar. As I suspected, the bankers wanted to >get rid of the Tzar's state bank that issued all his money. Russia >also sent their navy to protect the US during the civil war. He knew >it was a set up as well. JCT: Maybe Lincoln learned to use interest-free Treasury money called "Lincoln Greenbacks" from his association with the Tsar. Notice that all the crosswords regularly define Tsar as despot so it's quite likely that they weren't all that bad.
>Re: Interest free money. You probably know about New France >Playing-card money (see Bank of Canada currency museum); JCT: Yes, in the early 1980s, I picketed the Bank of Canada in Ottawa every Thursday when they set the new bank rate and did pop in to their museum to see them. Pretty simple examples of how interest- free government money could work and yet even with such historical examples right under their noses, many still fail to grasp how it could be done.
>Province of Alberta Prosperity Certificates (on line at the >www.glenbow.org search for scrip) JCT: I have a copy of one. Even though the Supreme Court of Canada prevented him from operating a provincial LETS ruling that only the feds could run money even if they were screwing it up, his "funny money" certificates did spur trade and save his province during the depression. He was a great Socred. Not like Ernest Manning who took over after him and sold the movement out. They made him a Senator and Bank Director as a reward. Notice Manning's son Preston is now the Reform Party of Canada leader and never mentions anything he learned while he was Socred. I guess Judas goats run in the family.
>and Hudson Bay Co. beaver tokens JCT: Never heard of this local corporate currency but I'm sure it was at least as good as Canadian Tire dollars.
>Re: Kosovo. what's the inside dope here. JCT: I don't know. We've always turned a blind eye to far greater ethnic cleansing of rural populations all over the Third World so I don't see why this particular set of victims are so much more important. Still, it does prove Noam Chomsky's point that the media can instill war mania just by focusing on the victims chosen for whoever's purpose. I'm sure Jean Chretien and Bill Clinton have some ready speeches for when the first North American boys come home in body-bags though I don't know how much it's going to make everyone feel better.
>I also thank you for clarifying for me the Social Credit system and >your equations. Most enlightening. >Now, what about the 'Compensated Discount' system. Is it really >necessary to avoid inflation? I think not. Regards, Baron Fowler JCT: The compensated discount was another way to balance the money in the numerator with the prices in the denominator. Just as dividends to everyone would be added in the numerator to balance some, compensated discount to businesses would be added to balance some more and finally, money spent "debt-free" without having to be taxed back as it would in a LETS, was the third input of new money into the numerator to hopefully balance the gap with the denominator. But with a LETS, it would be unnecessary just a dividend of new money, rather than taxes for interest recouped from the banks, is not necessary, nor government spending "debt-free" money. Interest-free "debt" LETS money solves the gap making all these compensatory measures obsolete. Finally, this is the last post where I'll be commenting on problems assumed to occur due to inflation or on why engineers should not bow to financial or democratic considerations in how they do their jobs. If I haven't satisfied those concerns by now, I doubt if I ever will and may go down in some people's books as that dictatorial engineer who wouldn't let them vote on how to engineer the system because his equation told him i=0. Of course, it's a great comfort knowing that Christ, Nehemiah and Mohammed were never considered slavery proponents for ordering the same thing. -------------------------------
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