American National Dividend - A populist reform
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oldickeastman
Jun 5, 2012, 1:46:49 PM6/5/12
to eastman_discussion
American National Dividend - A populist reform that borrows one of
Douglas's ideas to rid the land of economic depression and debt
slavery forever.
You wrote:
> Dick, I have read most of the documentation you sent me, as well
> as two books by CH Douglas (Social Credit / The New & Old
> Economy). ...
> ... I have some questions
> 1. Could you give me a brief outlay of the whole implementation & maintenance process of Social Credit into a country (especially to start)? I have not found much on the practical part: do you measure the wealth of state & person in order to calculate amount of money to introduce, do you wipe out & delete previous currency or exchange currency with citizens, national dividends is per month of quarterly, etc. (I understand the Social Credit Office who monitors Social Credit)
DE reply:
Preliminary Considerations (followed by direct answer to your
question)
First, the competence qualification.
1. The first thing is not to get it right, but to get it started.
2. Everything worth doing is worth doing badly.
3. If not us, who? If not now, when?
4. Nothing is written in stone
Second, operational authority - justification of this reform. In the
US the president is already operating with emergency powers that
enable him to do just about anything, including create fiat money (a
power Franklin Roosevelt had during the Great Depression but NEVER
used.) Political defense: The current system is fraudulent and
inherently harmful and larcenous. We need a system 1) not based on
debt-money, 2) not expandable or contractible according to the
interests and whim of private bankers, 3) not going to business sector
or government sector as investment or fiscal expenditure, but to
households to ensure consumer sovereignty,i.e., a market system led by
consumer demand, with adequate purchasing power in the hands of the
buying public to allow better than marginal businesses to make above
normal profits from which to internally fund their own expansion.
(There will still be firms making zero economic profit and also loss
-- but their fate will be exclusively according to their relative
performance in satisfying the customer and no longer to the
manipulations of international bankers manipulating loans outstanding
to effect alternating deflationary depressions and expansionary booms
that build capacity beyond or inappropriate to consumer demand. Only
this will repair the economy which has been mal-performing (except for
a few) for most of the history of the nation.
Third, method of developing administrative and analytical competence.
Adopt as our starting point the economics of Irving Fisher (inventor
of price indices and the quantity theory of money that is built around
the identity of exchange PQ = MV.
Fourth, addressing the problems of too much or too little dividend.
Finding the right disbursement vehicle: Existing banks, under
national regulation and reorganized. Under the department of
commerce. Under the taxing authority (nationalized) Internal Revenue
Service expanded to accommodate a negative tax - utilizing the
machinery already existing for income tax refunds).
Finding the right dividend amount.
What becomes administrative and scientific must start as a political
action based on guesswork and political acumen - that's the bad news.
The good news is that there is a very wide range of acceptable levels
and that for several reasons. First, because the money supply is not
held hostage by the lenders of capital, interest rates, inflation
(and the inflation premium added to interest rates) and deflation
(and the deflation windfall to lenders) of far less importance -
because this reform begins with direct boosts to consumer purchasing
power. The debt burden removed will affect only the financial sector,
it will be a blow to bankers and bond holders -- but not to the much
more important household and business sectors. These will get the
benefit of the increased demand. Inflation or deflation? At first it
will be inflationary, because in the short run supply is inelastice.
But inventories will be bought up and the demand will be sustained.
There may be price inflation, but in the longer run as hiring and new
orders up and down the production process -- from retail, to
wholesale to various stages of production and the building of
producers goods and the mining and harvesting etc of raw materials all
have time to adjust to greater demand there will be a supply-induced
deflation -- but with competition rewarded (under the present system
competitors are being wiped out, but under national household thin-air
credit competition will be "all over the place." So we expect a
natural inflation at first followed by reduction in prices due to
competition - but because the "wealth pump" of the National Household
Dividend (social credit) never stops, there will be adequate demand
for new goods to appear -- entrepreneurs in a fertile and rewarding
environment will increasingly see to that. We will have prices
falling due to competition and adjustment and economies of scale, but
new products coming into existence bidding for the same consumer
social credit dollars. The market will, for the first time, operate
the way the text books say it should operate -- without the feudal
excrecence of monopoly power born of private money monopoly that buys
monopoly privilege from hireling politicians. Under the Household
Dividend system the people will have money to buy their own
politicians and leisure (since they are not working extra to pay
monstrous debt) will have leisure left over to learn economics and get
involved in politics as all good citizens should etc.
The it is most important that the dividend be permanent and regular.
The amount of it will determine the price level -- the principles of
Irving Fisher are not suspended by this system, but price level and
interest rate do not matter much for level of business activity. We
are not worried about mal-investment, because the market system
adjusts freely and people are free to buy less of one good than
another and to change their minds - and the entreprenurs will
anticipate as they can and adjust as they must or go out of business
and make room for the entrepreneurs who can meet the requirements of
the hour. Relative prices matter, not absolute prices. Certainly
macro deflation -- general price level - becomes a thing of the past
are the adjustment factors (rather than interest rates) and price
level inflation to becomes (after the initial kick-in also becomes
negligible in its overall impact on production, distribution, standard
of living, employment etc. The mechanism of business cycles is
removed. The only problem is finding what the new permanent
adjustment level will be. BUT THE GAIN TO THE VAST MAJORITY OF PEOPLE
- those not connected with the financial sector or crony corporation
capitalism -- will not see a dip - once the under utilized resources
of the country are brought into play. The key of this is the initial
freeing of the economy from the constraints of debt, and those
regulations designed to protect corporations from little-guy
competition. Remember, everyone's debt burden -- will be lifted --
so it would be difficult indeed to botch the job so badly that most
people would not immediately see themselves as better off.
The big problem will be international suppliers on which we have
become so dependent. They have a window of opportunity to strangle
the new reform in the shortest run, before people can get enough
domestic production of foodstuffs and energy (gas, oil, coal, atomic,
and other)to become close enough to self-sufficient to allow the "new
seed" to sprout, take root, grow and flourish.
Transition principles: nationalize etc. check clearing machinery
freeze current reserves including deposits with the Fed nationalize
(draft) the Fed permanently suspend the power of its directors and
officers (for treason if weaker justifications are legally inadequate
to accomplish the task). induce to resign, persuade, or pack the
supreme court, or induce to resign, or impeach the supreme court if
they challenge the emergency actions)
So how to begin?
When I was running for president a few months ago -- I quit when my
campaign video garnered less that 300 views and 6 likes after three
months -- it is now up to 500 views -- I wrote what I would do on
the first day.
But before I paste that message below let me give the answer I can
give now -- in my dottage:
1) Responding to the present emergency where a million or more deaths
and economic breakdown and civil unrest are inevitable if we do
nothing, and knowing the cause of the difficulties that are
bankrupting all but the richest few percent of Americans the
president with the emergency powers already active and authorized by
Congress do effective immediately Nationalize the Banking System
including the Federal Reserve and suspend decision making powers not
in accordance with directives to be issued by the president from this
point forward. The check clearing process is to continue
uninterrupted. Banks are to keep open all savings and checking
accounts. Additional loans on reserves may continue to be made up to
an average of total loans for the previous six months prior to last
month, throwing out the highest and lowest figures of those months in
calculating the average. Banks will be allowed exceed the current
reserve requirement to maintain current loans outstanding.
Foreclosures are suspended and collection efforts suspended -- pending
revision of the bankruptcy law forthcoming. The Federal Reserve is to
make available to each bank upon request its present reserves on
deposit at the Fed. The Fed is hereby considered drafted into the
service of the United States until it is officially reorganized after
which the emergency period will be ended. The owners of the member
banks and their holding companies have no longer any authority over
the conduct of these institutions until the end of the reorganization
of the money and credit system.
Foreign trade will continue as before with the understanding that
American foreign holdings abroad -- American corporation shares of
ownership of chinese industry etc. -- will be sold in dollars against
our debt. Those nations cooperating with this arrangement will have
priority in bidding for this asset wealth.
The Federal Reserve already has the power to lend to corporations, and
so it shall lend to the Bureau of Internal Revenue -- which if it has
been a secretly private corporation of the City of London -- is hereby
nationalized and ,like the Federal Reserve, drafted into the service
of this country in this national emergency. The IRS, will be provided
(lent or given, view it either way) money from the Fed which is to be
refunded to every citizen who has a bank account. Banks, in exchange
for the right to lend their existing reserves, now that the legal
requirement is dissolved (since we no longer have systematic deflation
causing bank failures and since it is no longer profitable to induce a
deflation by a coordinated call on loans by banks...) as I was
saying, banks will open accounts for every citizen who applies for
one, payed for out of the legal reserves. These accounts will receive
the social credit dividends, a simple crediting of bank accounts --
one per social security number, thumb print, or voice print etc. to
ensure one account per citizen -- and will be checkable. Any bank
may charge for checks if they like. Of course a citizen can have the
dividend credited to one of his existing checking accounts.
The decision to how much the first dividend payment will be is a "fly-
by-the-seat-of-your-pants" decision -- so exciting to blaze an new
trail where there is no precedent to work from -- you just pick a
figure, multiply it by the best guess of where the average household
and the middle quartiles are with respect to debt payments and income
and the amount losses and bankruptcies are ahead of startups and firms
indusrial firms and farms making profits -- no science here - more
like old fashioned weather forecasting - just to get the intitial
dividend amount.
Once the initial amount has been distributed it will become the number
that the rest of the economy adjusts to -- realizing that in the
short run the prices and supply are inelastic -- realizing that some
people will freeze their activity and hoard in fear of what is going
to happen -- but fortunately because purchasing power will be so
widely diffused they will not be able to paralyze the economy.
Adjustments will be made from there.
Now here is the message I put out last year - for comparison with the
above:
My Economic Program and Why Nothing Else Will Do
Dick Eastman
We are in hyper-Deflation -- like Argentinean hyper-Deflation rather
than 1923 German Inflation -- and so both spending cuts and tax
increases will only exacerbate economy failure. That is not to say
that government spending increases and tax cuts will help. Inflation
and deflation are not exact opposites of each other. Final product
prices do not fall in deflation. Quantity produced and employment
fall and wages fall. Government spending increases do nothing if they
are debt-financed -- they just add to the debt burden and
corporations know this if the little firms do not. And tax cuts are
also useless for reflating the economy for two big reasons, among
others. First, even with less tax penalty for production and
investment there is still no consumer demand to make any consumer
enterprise sufficiently profitable to be worth the investment.
Second, there is incentive to keep the cash because in a hyper-
Deflation dollars gain in purchasing power of foreclosed assets and
distress sale assets and privatized assets (because no one is making
enough income to tax to allow the government to get buy without
selling off assets). The creditor class, that is finance, finds it
more profitable to hold on to dollars in a hyper-deflation and so will
not invest their tax savings in American production which would hire
workers and ease the foreign trade imbalance. So, tax increase does
not good, tax decrease does not good, tax increase does no good and
tax decrease does not good -- that is, does not good for the domestic
economy and those constrained to make their livings in it. And of
course what government spending is not paid in taxes has to be
borrowed -- and paid back with compound interest. So what about
doing nothing? That also will not save us, because of net interest
drain giving us ever-worsening deflation -- because our money is
loans -- right now mostly debt-consolidation second mortgages and
mortgage refinancing, not business loans or construction loans. Our
money is loans -- not printing press money made by government as the
thoroughly dishonest Austrian School economists tell you. Our money
is loans and for every dollar of loan added to the flow of money in
circulation in the domestic economy there comes with it a subsequent
subtraction from the flow of that much principal plus compound
interest. So money in circulation shrinks automatically, even as
deflation kills off output. This is the deflationary spiral. Doing
nothing is as fatal as austerity measures.
Is there a solution?
Yes.
The solution is to shelve the system where our money is all loan
created checkbook money and switch to a system where we the government
provides each household -- each citizen -- with pure so-called "thin-
air" fiat money on a regular basis -- money that is simply received
like a tax-withholding refund check or a social security check or a
check from a rich aunt who loves your selflessly -- a check that does
not have to be paid back. All new money must be distributed in this
way. That will make the householder sovereign in his own country.
It will ensure that the economy is directed by consumer-demand pull,
rather than corporation-investment push which pushes us into wars and
boondoggle government spending programs or post-disaster
reconstruction which invites the absolutely corrupt super rich to
arrange disasters to clean up.
The four principal economic reforms of this populist proposal are 1)
repudiation of debt to international finance -- because the contract
was fraudulent, the conditions impossible to meet and fraud vitiates
all contracts. 2) switch to pure fiat national treasury money and the
elimination of the central bank and of fractional reserve banking --
banks will lend depositors' time deposit savings or they will not
lend at all. 3) The introduction of all new money exclusively
through the the household sector -- all purchasing power will
originate with a check or electronic deposit in consumer bank
accounts by fiat, rather than a debiting of someone elses account,
rather than a transfer of funds. If the people want public services
they will have to have their representatives arrange to tax them for
it. Government will not be permitted to borrow. 4) The corporation
will be done away with and replaced by the single proprietorship or
partnership structure with owners incurring full liability. Non-
voting stock may be issued to investors, through the internet, not
through Wall Street, which will no longer exist. 5) Foreign trade
will be balanced and never "favorable" -- we pay for our imports with
our exports. 6) foreign held dollars will not be allowed to enter the
US and buy up our land -- but will become a separate currency that
trades in its own right and can be used to buy up American corporation
assets located outside the US. The US economy will become
nationalistic. Americans will not own companies in other countries.
7) Foreign ownership of American soil production plants will be
regulated in the interests of the US, but in fairness to the foreign
owners -- but foreigners may not own land here, and that includes
expatriates. 8) Dual citizenship will not be tolerated -- and those
insisting upon citizenship in other lands will require a current visa
to stay here. 9) We will allow all drug addicts to obtain drugs at
cost from the US government -- this will end the drug trade and the
trillions of dollars laundered into international banks each year --
which will require a full scale war which to win will require all of
our troops at home.
These are the steps that I would use emergency powers of the President
to impose by the signing of executive orders during my Inaugural
Address. Executive orders that voters will be able to read in full
months before election day on Tuesday, November 6, 2012. I have
observed that whatever campaign promises don't get done right away,
never get done. It is the only way a reform president could every
possibly think of overcoming the solid wall of obstruction and
sabotage that vested criminal interests would impose to keep their old
rackets going.
My running mate is Max Lund. We have no party. We ask for a grass-
roots every-supporter for himself, campaign for getting an indpendant
on the ballot in states where write-in candidates are not permitted.
Every citizen is my campaign manager. Lobbyists need not apply. This
candidate is fixed in his goals. Non-establishment appointees --
mostly from the mid-west and west I might as well tell you now --
of my cabinet will take care of all other matters. I am not looking
for experienced people -- I am looking for people who know right from
wrong and common good from the usual class who always seek to profit
from corruption of the system.
I hope you will be with me in realizing these reforms on January 20,
2013.
Yours sincerely,
Dick Eastman
Yakima, Washington
> 2. Are taxes obsoleted immediately, gradually or not at all on a national scale? I understand maybe in cities there will be isolated taxes for use of public utilities or at least I think anyway
DE reply: Taxes continue as the only means of funding government. It
is the height of corruption to award Congress the power to spend money
into existence. The money must be created in the hands of the
citizens and the government - the representatives of the people - must
be elected by the people - and run for office on ample campaign money
from the pockets of the common people -- and when elected they will,
on behalf of the constituents - legislate the public services the
people desire at the expense of private goods. Withholding taxes will
be eliminated. The citizen will pay his taxes perhaps monthly or
quartery -- with itemization - available on the internet of how much
of his payment goes to this or that big item or category of small
item. The leisure time freed up by not having to work to pay usury
will be taken up in part with civics and the subject of public
financing. The people will soon be buying schools that they control
and that teach thrift and responsibility in both the public sphere and
home economics. If the people want the government then they must elect
people or participate in public themselves to vote the goods which
then everyone must pay for knowing exactly what they are paying for.
Political sovereignty stems from economic sovereignty. We are taking
econmic sovereignty from the financial sector and giving it to the
household sector. Also, economic sovereignty comes from the
origination of money and that is now to belong to the people. We will
also have our majority party in Congress abolish the corrupt practice
of separating legislation from appropriations and ways and means. No
public good will be legislated without the private cost being approved
along with it for all to see. This measure and the abolition of
deficit-financing will usher in the world's first truly populist
government.
_____
3. Do all citizens get a dividend payment - all ages? If so, will the
parents have the right to take child money until of legal age. I ask
to understand the possibility of baby booms for extra cash
DE reply: Today if an elderly person who had a child late in life
retires and receives social security there is additional payment for
the child, but the parent must indicate that the money was spent for
the child or put aside for the child - but we expect it to be spent
for the household. The parent is guardian and trustee and the child's
family is the parents family. Now this raises the question of people
having children to get more money for the family. The issue is
complex. First the incentive to have too many children is there.
Second, the birth of a child is not a burden for the community because
it means more purchasing power in the community. Third, under our
system wealth will be so distributed and the family's means of raising
children will so that they are assets to the community is greater.
Fourth, the intelligence and self-responsibility of people will
increase in an economy where labor is sought to operate thriving
business -- people will be in demand, they will not be scarce. See
who well the Japanese live in crowded conditions when each is taught
self-discipline and appropriate behavior etc. HOWEVER, AN ARBITRARY
RULE MUST BE MADE HERE: Some formula like one of the following:
Either a limit of three children with full social credit dividend
during their childhood lives - although a smaller amount can be
accumulated and saved for education or a start in life -- saved in a
government account that cannot be touched until the specified need -
or perhaps a medical emergency. This must be elaborated.
Another question is illegal aliens. I favor allowing aliens to work
freely in the US. There will be plenty of demand for labor for all.
Aliens will not receive social credit, which requires full
citizenship. However this will not be so big an issue, because the
economy will no longer be a sinking ship with people fighting each
other for the "lifeboat" of a job in a dwindling job market.
_____
4. What if a company is not registered with the Social Credit office?
Do they just not participate & how do you monitor if something is
consumed or purchased if the transaction is made without knowledge of
such or if a registered company makes a transaction without receipt.
How do you control regulating purchases of consumable good &
consumption of goods if they are not all registered & people crook the
system? Hope I have explained myself ok (seemed to have ranted on
there a lil)
DE reply: You have indeed read Douglas. My version is different. If
you are a citizenship and you bother to get a checking account and ask
the bank to handle your social credit account and that of your small
children, then you are in.
Most important I reject the Douglas rebate - the compensated rebate to
retailers for the just price -- as unworkable and undesirable and a
severe moral hazard if attempted. The American National Dividend
reform consists of the household dividend, fiat thin-air money, 100
percent reserve requirement lending (after the transition) by banks
who get their money from citizen time savings accounts -- lending to
entrepreneurs at one amount, say for example at 6% and borrowing for a
fixed amount of time from savers (with withdrawal penalty in force)
the bank earning the spread of 3% in this case - amounts varying with
risk and duration of the loan etc. THERE IS NO REGISTERED COMPANY IN
THIS 'AMERICAN POPULIST' VERSION OF SOCIAL CREDIT. The rebate and
compensated "just price" requires a police state to manage and
enforce. I am sorry I did not tell you that sooner -- I thought you
had read my stuff. (If you want the pure Douglas version I can
recommend some orthodox purist Douglas people. The system I am
describing is much simpler -- the Douglas plan I deem to be too
impossible to get started and too cumbersome and bureaucratic to keep
going. Also, the more rebate you have the less dividend you can
give. I say no. Here is a diagram I made telling the difference
between the two:
5. What if people are hired illegally & not registered on company
books? Does this affect dividend payments negatively?
DE reply: Good question. That is why I abandoned the involvement
with retailers and rebates and "just price" and auditors and rules and
fines and all that nightmare.
> 6. How will a Social Credit currency fair up on the international market? Will the currency have value, will it float as an international currency, etc
DE reply: The US will have domestic economic strength and build up
its domestic products so we will have the most innovative and
entrepreneurial economy -- not held down by rich privileged kids
whose idea of competition is to bankrupt the competition through
engineered deflations that kill demand while "daddy" in finance gives
"sonny" in a multinational cooperation all of the credit he wants to
crush the little honest guy who really has the better ideas. We will
become the people we once were -- I am not talking about race -
phooey on race - I am talking about the people that are shaped up by
a true land of opportunity - not opportunity for financial swindle
and monopoly practices, but real reward meeted out by the sovereign
consumer, the smart housewife, the bargain hunter, the quality seeker
- so that the best entrepreneur who satisfies the most per dollar of
cost will make the profit to do it again on a larger scale and the
lazy guy who inherited the business from his more energetic daddy will
go under unless he wises up and gets good at giving the people more
satisfaction for the dollar than the other guy. That is the economy
we all want, and that is the economy the conservatives only pretend we
have now - because they are all of those worthless heirs who are
unfit for competition and thus go to government and bankers to cut off
from credit the worthy non-elite outside-the-club workers.
> 7. How will Imports & Exports play a part in the Social Credit system with different currencies, prices, registering consumption, etc?
DE reply: The country will export its products and its resources and
these will earn the foreign money with which to buy up to that amount
of foreign goods. Shippers may extend commercial credit to transport
the goods, but they take the responsibility. The big problem is our
debt burden owed to foreign countries -- our repudiation will not be
without some settlement -- the foreign located assets and military
bases of the US in exchange for cancellation of our debt. Other
countries, if things go right, will be following our good example, and
they too will be looking for balanced trade rather than merchantilist
"favorable trade" -- favorable trade is anti-social behavior in the
community of nations.
> 8. Can you contract overseas services & expertise & pay these institutions & how does this play a role in the Social Credit system?
DE reply: Right now there are roughly ten to a hundred times as many
dollar denominated accounts and dollars outside the US domestic
economy than inside. We are already dead if this money all suddenly
came home to find something to buy. And that may happen any time with
the Rothschilds teaming up with the Rockefellers to buy US assets now
that they have all of our wealth uip for sale in the deflationary
depression they have engineered for us. So the job now as the job in
the future under American social credit is to keep that from
happening (and we know that neither Obama nor Romney nor free-
marketer Ron Paul will prevent that from happening.) So we will settle
our debts with the sale of American overseas holdings -- but at the
same time we wil start the permanent pattern of what our foreign trade
will be -- the balanced trade -- more or less barter among nations
according to comparative advantage in production -- tropical fruit
from the tropics and French fashions from France our grain and other
products to come will pay for our imports by the foreign currency we
collect in selling them. The currency market will no longer be the
speculative monster controlled by international thieves that it is
now, but will be conducted openly so that any person with Japanese yen
can sell that yen for dollars on the equivalent of E-bay -- we will
cut the Rothschilds out with the computer revolution. If a dollar
exists that a foreigner wants buy so he can buy an American good,
then let him do so freely. If a foreign currency can be bought for
dollars let anyone do so -- at the market price with the perfect
competion of perfect knowledge and perfect competition that we have
today. The problem of course is the big overload of foreign held
dollars -- and THAT may require that the new social credit be
separated from the old dollars, the old dollars that have been the
worlds reserve currency. The American people cannot be made victims
of that Reserve Currency -- and don't let anyone tell you that we
have been beneficiaries of that system. Only our deviant financial and
corporation elites have been beneficiaries -- and we are now fixing
their wagon with this reform. The American people have been victims
like everyone else -- look at the economic history of the US -- read
the book the Octopus or Jack London's The Iron Heel for a taste of
how the American people have suffered at the hands of Rothschild-
serving Wall Street (with Morgan, Baruch, Rockefeller etc being tools
Rothschild.) I believe the world -- Iceland, Ireland, Greece, Spain
right now, and the rest of the world soon enough -- will see that our
reform needs the cooperation of the other peoples of the world, not
their opposition. Other nations will follow our example. They will
throw out the libertarianism, the communism, the socialism, the labor
movement -- our program answers all of the problems those groups claim
to address but in reality do not.
Eventually foreign trade will go on as always -- except that
investment will no longer be international. If a country has a great
comparative advantage that has not been developed, let it be developed
from profits from sales abroad, not by foreign investment that can
come or go at the malicious and pirating whim of international
speculators.
_____
> 9. Does government provide a new made currency or a type of credit voucher different to the established currency?
The checking account deposit, will be the money of the land -- the
treasury will supply dollars which will simply be a check of the
united states government that does not need endorsing -- the
government will have its own checking account -- banks can buy dollars
from the government either at cost or for free (as the elected
legislators decide) - at first the Federal Reserve Notes of the
nationalized Federal Reserve will have to continue as money --
perhaps with a freeze to prevent foreign dollars to keep from flooding
in for conversion. Let the money salted away in the Camen Islands and
dollar denominated Swiss Bank Accounts remain a foreign reserve
currency on its own -- just take the name United States off the new
bills that are produced. They can't come back and muddy our new money
system. They will have the status of any other currency. If they
external dollars want in, they will have to buy our domestic dollars
at the going price.
I have a hunch the Rothschilds will not let their Federal Reserve
Dollars disappear -- so the foreign USD will become an international
currency superintended by the usural international banking crowd as
long as they can find a nation that will harbor them. Our dollars --
perhaps under a new name -- the Eagle has been used for our gold
pieces in the past -- or something else. The "cred" doesn't sound
quite dignified enough - but someone will find the right name.
DE reply:
> 10. How will Social Credit work globally with all countries having distinct currencies (will the currencies have same value or float)
DE reply: The usual currency market -- foreigners will buy our
goods by first selling their money for ours -- and we will buy their
goods by selling our money for theirs -- and the market will be super
efficient - done almost costlessly - in competitive computer exchange
systems that are very inexpensive to create and operate -- I am sure
it already exists -- only we will make it available to all. In fact
the US Department of Commerce could set up a currency exchange that
would allow people to buy foreign goods on the internet and exchange
currency costly at the going rate. The country with little to sell
and needing much from abroad will find that its money is very cheap on
the market and that buys very little foreign currency -- but
somewhere there will be a country with the opposite set of relative
abundance and need and they can sell -- anyone on the internet can be
an arbitrager and make the market super efficient. We no longer need
Rothschild for that -- in fact Rothschild has been the great force
preventing that advance. Once social credit is launced the world will
open up. They talk about free - trade now -- but it isn't. The debt
and the interest burden and the coming and going of investment capital
and the intimidation by international lenders that we are seeing all
over - that ends with Greece and Ireland - that is what we will be
rid of.
> 11. Does government give the dividend through the banks or by some postal or other similar service?
DE reply: The nationalized IRS will give up the machinery to the
Department of Commerce who will transfer the thin-air money to the
checking accounts of each citizen. Every citizen will have social
credit. The children's accounts can be pooled with the parents
checking account as mentioned above.
_____
> 12. What are the banks role in the Social Credit system? I think that they will only be allowed to loan what they have (no fractional reserve system), how will they make profits & generate additional income & will they still provide interest on savings, etc.
DE reply: Banks will offer checking, perhaps for a fee. But every
bank of the nationalized Federal Reserve system will be required to
offer an checking account to every citizen who does not already have a
social credit account. For most people it will be just one more
automatic deposit into their demand deposit account. The really poor
will have checking accounts for the first time and the banks may not
mind because they will have money to put into them and the businesses
they lend to will have the extra demand with which to earn a profit.
Certainly, no fractional reserve system. They will lend money - their
own and the money of those who have elected to put their savings in a
time savings account for a given rate of interest offered in exchange
for the privileged of the bank lending it out (with a penalty for
early withdrawal.) No runs on banks because there will not be a
collapsible money-multiplier money any more. Even if loans are
called, the savers will simply go to their banks and ask for their
money back -- but there can be no national event to trigger that
happening all over all at once - as with a stock market crash.
It is also part of the reform plan that I was offering that the US do
away with the corporation and replace it with the single
proprietorship and partnership structure only with full liability and
the ability of a firm to issue stock - common with no voting rights
and no liability - only to 49 percent. The full liability resting
with the controlling share holders, the 51 percent. Corporations are
creatures of the bankers, they are made up of the body parts of all
the little businesses they have destroyed with their deliberate market
collapses and deflationary depressions. The corporation is part and
parcel with the usury system and it must vanish with that
system.
_____
> 13. Do the super rich also get a dividend? I read that Douglas mentioned that anybody with monthly wealth exceeding 4 times the dividend may be exempt?? Not sure that I am fully correct
DE reply: Everyone gets a dividend. There aren't that many super
rich for it to matter.
_____
> 14. When a current Usury system changes to Social Credit, what happens to Government debt, legitimate debt? How does this play a part in the Social Credit system?
DE reply: "Legitimate" is a bogus concept - used to but kings
back on the thrones after the French revolution and Napoleon were
defeated. The goverment debt has all been accumulated in a great
fraud upon the people. Fraud vitiates all contracts -- and the
social contract supercedes -- see the preamble of the US Declaration
of Independence. There are no natural laws when it comes to the
economic system. Laws of economics yes. Natural consequences, yes.
But the rules are conventions and better conventions producing better
results are necessary right now.
_____
> 15. What is your opinion on criminals, etc receiving dividend payments ( I ask in relation to causing a rift in society about issues like this)
DE reply: It will lesson their incentive to be criminals
_____
> 16. The crisis is deflationary.. I get that now.. Thank you very much for clarifying that.... So the Euro will also become more valuable as the deflation continues? It is the same as the US?
DE reply: The pie shrinks with the purchasing power that pays its
production so prices are not reflective of the loss of output and the
decrease of consumption, living standards and the loss of household
and public wealth to foreign creditors.
_____
> 17. What happened in Germnay after WW2: There was hyper inflation wasn't there? How does it differ to today's crisis
DE reply: The hyper deflation followed world war one. It was
intentional. The victors wished to plunder the savings of Germans who
had bought bonds to fight the war. The bonds were still owing the the
German people and the international lenders did not want that much
money owing to the German middle class so they had the Reichsbank
flood the market with Marks. This destroyed the purchasing power of
the nominal savings of the war bonds, reducing them effectively to
zero.
Today the bonds (IOUs) are in the hands of the Moneyed elite and not
the middle class. The American middle class are deep in debt. Thus it
is in the interest of those who are hoarding all of their interest
earnings and bond wealth and dollar deposits to allow maximum
deflation to give them a windfall increase in wealth and also to
force bankruptcies so that land, businesses, homes, government assets
go to the creditors in a great wealth transfer. You never seen
inflation when Rothschild is holding the dollars. Remember, the Fed
is their bank, not the US government's bank. They are buying dollars
-- they are selling gold for dollars and they are selling their US
securities (better to call them "jeopardies" these days) for dollars
so they can get the windfall from deflation, so they can buy assets in
the distress sales that occur in a deflationary depression.
_____
> 18. Can free trade (without treaties, subsidies, etc) & free markets work with Social Credit?
DE reply: Free trade cannot work unless investment stays home and
labor does not migrate. If capital can flee - as it has - then all
of the investment will go to the country with an absolute advantage
from the investors point of view - and that place is China where the
people work for next to nothing, where there are few regulations,
labor agreements, environmental protections -- so Red China ends up
the biggest corporation in the world selling its totalitarian-regime
disciplined labor services to other corporations. This would not have
happened if Zhou Enlai and David Rockefeller -- through their
geopolitical architects, especially Henry Kissinger -- plan the
deindustrialization of the US to build up (and save from a Chinese
populist revolution) the Princelings of China, who are Triad organized
crime involved in drug trade around the world in alliance with the
City of London, Israel and the US ruling elites.
_____
> 19. Do you think that liberal idealistics go against Social Credit? I read somewhere that there may be some issues in regard to this. I think it was you or another Eastman... perhaps your brother?? Besides economic policy, I would really like to hear what you have against Ron Paul policy??
DE reply: Social credit is liberal. Ron Paul is not liberal. He is
libertarian - part anarchist and part libertine. Free trade as sold
by the Rothschilds Rockefellers the libertarians and the Austrian and
all hired economists in the think tanks, international organizations,
the US treasury and state department -- they are for a phony kind of
free trade. David Ricardo who developed the principle of mutual gains
from trade when nations are free to trade according to comparative
advantage stipulated a necessary condition for this outcome. CAPITAL
AND LABOR MUST NO BE ABLE TO MIGRATE -- as I stated in answer to
another question. If capital (investment in industrial plant and
machinery) is allowed to go the country with abosolute advantage in
production (because they allow a lower wage and the beating of
workers and the easy and cheap replacement of workers damaged in the
production progress so that you just fire them and forget them because
they have no protections from government ) then industry will go
there -- india and china are good countries for providing
corporations with absolute advantage because the people are
intelligent an capable and willing to work for next to nothing because
next to nothing is all they have known.
_____
> 20. Do you differ with Douglas that the compensated price is not necesary, & that it can be given as dividend? How does inflation come into play here? Do you think inflation must be controlled when rising too high or left to be?
DE reply: Yes, the compensated price rebate is a nightmare of
complexity and moral hazard in its administration - and it is a
replacement for putting purchasing power directly in the hands of the
household, where they might use it to start up their own business or
to pay someone directly to do work on their own property etc.
Douglas might have gotten his idea off the ground had he not put in
that nasty trouble maker the compensated price rebate.
> 21. Is a stock market still plausible & advisable if regulated in a Social Credit Economy?
DE reply: The corporation must go. The single proprietorship is the
answer. Loans to corporations can be immediately outlawed. Only
proprietorships can reveive loans. That will force corporations to
sell off portions of themselves to fund the remainder, reducing the
concentration of corporate monopoly power. Next we eliminate the
corporation structure completely -- forcing the breakup into little
propritorships and partnerships in forced auction. Like the day the
giant Bell Telephone complany was broken up. All Corporations are
conspiracies in restraint of trade. We must end the legal personhood
of corporations first thing. Then revise the fourtheenth amendment so
that it applies to former slaves only and not to corporations as it
has been interpreted as doing since it was written -- a true
conspiracy -- getting the worst law grafted to the freeing of the
slaves and to their right to vote etc.
> 22. Is saving a good idea with Social Credit or is it better to spend and consume?
DE reply: That is a householders decision. If they want to do
something big - start a business, leave a legacy, send someone to
college, live in luxury in old age -- then they will save -- while
others -- like people who want to own a home while their kids are
still young and living with them -- they can each make that possible
for the other with the bank as the intemediary. Nothing wrong with
that. That's freedom, isn't it?
> 23. What if there was a building that was needed to be constructed. This could be provided by government through funding and the building could get under way. What would happen if there were no expertise (builders, architects,etc) in the country to realise the project. Would it go undone or could you get expertise & resources from abroad?
DE reply: We still have tourists, and people who come here to study
and go abroad to study. We still can import and export goods and
services. Or the foreigner with the expertise can come here and
practice his profession or skill, and when he goes home convert his
dollars into the money of his land. None of that changes. But most
of all people will not be so paranoid of foreigners taking their jobs
because in a country with strong consumer demand that doesn't dry up
there is constant demand for labor - and people are not so jealous of
foreigners coming - but look on them as new customers -- because
people have money and spend it. They are not animals in the desert
fighting for the last drops from a drying up mud hole.
Dick Eastman
Yakima, Washington
oldickeastman at q dot com
Douglas's ideas to rid the land of economic depression and debt
slavery forever.
You wrote:
> Dick, I have read most of the documentation you sent me, as well
> as two books by CH Douglas (Social Credit / The New & Old
> Economy). ...
> ... I have some questions
> 1. Could you give me a brief outlay of the whole implementation & maintenance process of Social Credit into a country (especially to start)? I have not found much on the practical part: do you measure the wealth of state & person in order to calculate amount of money to introduce, do you wipe out & delete previous currency or exchange currency with citizens, national dividends is per month of quarterly, etc. (I understand the Social Credit Office who monitors Social Credit)
DE reply:
Preliminary Considerations (followed by direct answer to your
question)
First, the competence qualification.
1. The first thing is not to get it right, but to get it started.
2. Everything worth doing is worth doing badly.
3. If not us, who? If not now, when?
4. Nothing is written in stone
Second, operational authority - justification of this reform. In the
US the president is already operating with emergency powers that
enable him to do just about anything, including create fiat money (a
power Franklin Roosevelt had during the Great Depression but NEVER
used.) Political defense: The current system is fraudulent and
inherently harmful and larcenous. We need a system 1) not based on
debt-money, 2) not expandable or contractible according to the
interests and whim of private bankers, 3) not going to business sector
or government sector as investment or fiscal expenditure, but to
households to ensure consumer sovereignty,i.e., a market system led by
consumer demand, with adequate purchasing power in the hands of the
buying public to allow better than marginal businesses to make above
normal profits from which to internally fund their own expansion.
(There will still be firms making zero economic profit and also loss
-- but their fate will be exclusively according to their relative
performance in satisfying the customer and no longer to the
manipulations of international bankers manipulating loans outstanding
to effect alternating deflationary depressions and expansionary booms
that build capacity beyond or inappropriate to consumer demand. Only
this will repair the economy which has been mal-performing (except for
a few) for most of the history of the nation.
Third, method of developing administrative and analytical competence.
Adopt as our starting point the economics of Irving Fisher (inventor
of price indices and the quantity theory of money that is built around
the identity of exchange PQ = MV.
Fourth, addressing the problems of too much or too little dividend.
Finding the right disbursement vehicle: Existing banks, under
national regulation and reorganized. Under the department of
commerce. Under the taxing authority (nationalized) Internal Revenue
Service expanded to accommodate a negative tax - utilizing the
machinery already existing for income tax refunds).
Finding the right dividend amount.
What becomes administrative and scientific must start as a political
action based on guesswork and political acumen - that's the bad news.
The good news is that there is a very wide range of acceptable levels
and that for several reasons. First, because the money supply is not
held hostage by the lenders of capital, interest rates, inflation
(and the inflation premium added to interest rates) and deflation
(and the deflation windfall to lenders) of far less importance -
because this reform begins with direct boosts to consumer purchasing
power. The debt burden removed will affect only the financial sector,
it will be a blow to bankers and bond holders -- but not to the much
more important household and business sectors. These will get the
benefit of the increased demand. Inflation or deflation? At first it
will be inflationary, because in the short run supply is inelastice.
But inventories will be bought up and the demand will be sustained.
There may be price inflation, but in the longer run as hiring and new
orders up and down the production process -- from retail, to
wholesale to various stages of production and the building of
producers goods and the mining and harvesting etc of raw materials all
have time to adjust to greater demand there will be a supply-induced
deflation -- but with competition rewarded (under the present system
competitors are being wiped out, but under national household thin-air
credit competition will be "all over the place." So we expect a
natural inflation at first followed by reduction in prices due to
competition - but because the "wealth pump" of the National Household
Dividend (social credit) never stops, there will be adequate demand
for new goods to appear -- entrepreneurs in a fertile and rewarding
environment will increasingly see to that. We will have prices
falling due to competition and adjustment and economies of scale, but
new products coming into existence bidding for the same consumer
social credit dollars. The market will, for the first time, operate
the way the text books say it should operate -- without the feudal
excrecence of monopoly power born of private money monopoly that buys
monopoly privilege from hireling politicians. Under the Household
Dividend system the people will have money to buy their own
politicians and leisure (since they are not working extra to pay
monstrous debt) will have leisure left over to learn economics and get
involved in politics as all good citizens should etc.
The it is most important that the dividend be permanent and regular.
The amount of it will determine the price level -- the principles of
Irving Fisher are not suspended by this system, but price level and
interest rate do not matter much for level of business activity. We
are not worried about mal-investment, because the market system
adjusts freely and people are free to buy less of one good than
another and to change their minds - and the entreprenurs will
anticipate as they can and adjust as they must or go out of business
and make room for the entrepreneurs who can meet the requirements of
the hour. Relative prices matter, not absolute prices. Certainly
macro deflation -- general price level - becomes a thing of the past
are the adjustment factors (rather than interest rates) and price
level inflation to becomes (after the initial kick-in also becomes
negligible in its overall impact on production, distribution, standard
of living, employment etc. The mechanism of business cycles is
removed. The only problem is finding what the new permanent
adjustment level will be. BUT THE GAIN TO THE VAST MAJORITY OF PEOPLE
- those not connected with the financial sector or crony corporation
capitalism -- will not see a dip - once the under utilized resources
of the country are brought into play. The key of this is the initial
freeing of the economy from the constraints of debt, and those
regulations designed to protect corporations from little-guy
competition. Remember, everyone's debt burden -- will be lifted --
so it would be difficult indeed to botch the job so badly that most
people would not immediately see themselves as better off.
The big problem will be international suppliers on which we have
become so dependent. They have a window of opportunity to strangle
the new reform in the shortest run, before people can get enough
domestic production of foodstuffs and energy (gas, oil, coal, atomic,
and other)to become close enough to self-sufficient to allow the "new
seed" to sprout, take root, grow and flourish.
Transition principles: nationalize etc. check clearing machinery
freeze current reserves including deposits with the Fed nationalize
(draft) the Fed permanently suspend the power of its directors and
officers (for treason if weaker justifications are legally inadequate
to accomplish the task). induce to resign, persuade, or pack the
supreme court, or induce to resign, or impeach the supreme court if
they challenge the emergency actions)
So how to begin?
When I was running for president a few months ago -- I quit when my
campaign video garnered less that 300 views and 6 likes after three
months -- it is now up to 500 views -- I wrote what I would do on
the first day.
But before I paste that message below let me give the answer I can
give now -- in my dottage:
1) Responding to the present emergency where a million or more deaths
and economic breakdown and civil unrest are inevitable if we do
nothing, and knowing the cause of the difficulties that are
bankrupting all but the richest few percent of Americans the
president with the emergency powers already active and authorized by
Congress do effective immediately Nationalize the Banking System
including the Federal Reserve and suspend decision making powers not
in accordance with directives to be issued by the president from this
point forward. The check clearing process is to continue
uninterrupted. Banks are to keep open all savings and checking
accounts. Additional loans on reserves may continue to be made up to
an average of total loans for the previous six months prior to last
month, throwing out the highest and lowest figures of those months in
calculating the average. Banks will be allowed exceed the current
reserve requirement to maintain current loans outstanding.
Foreclosures are suspended and collection efforts suspended -- pending
revision of the bankruptcy law forthcoming. The Federal Reserve is to
make available to each bank upon request its present reserves on
deposit at the Fed. The Fed is hereby considered drafted into the
service of the United States until it is officially reorganized after
which the emergency period will be ended. The owners of the member
banks and their holding companies have no longer any authority over
the conduct of these institutions until the end of the reorganization
of the money and credit system.
Foreign trade will continue as before with the understanding that
American foreign holdings abroad -- American corporation shares of
ownership of chinese industry etc. -- will be sold in dollars against
our debt. Those nations cooperating with this arrangement will have
priority in bidding for this asset wealth.
The Federal Reserve already has the power to lend to corporations, and
so it shall lend to the Bureau of Internal Revenue -- which if it has
been a secretly private corporation of the City of London -- is hereby
nationalized and ,like the Federal Reserve, drafted into the service
of this country in this national emergency. The IRS, will be provided
(lent or given, view it either way) money from the Fed which is to be
refunded to every citizen who has a bank account. Banks, in exchange
for the right to lend their existing reserves, now that the legal
requirement is dissolved (since we no longer have systematic deflation
causing bank failures and since it is no longer profitable to induce a
deflation by a coordinated call on loans by banks...) as I was
saying, banks will open accounts for every citizen who applies for
one, payed for out of the legal reserves. These accounts will receive
the social credit dividends, a simple crediting of bank accounts --
one per social security number, thumb print, or voice print etc. to
ensure one account per citizen -- and will be checkable. Any bank
may charge for checks if they like. Of course a citizen can have the
dividend credited to one of his existing checking accounts.
The decision to how much the first dividend payment will be is a "fly-
by-the-seat-of-your-pants" decision -- so exciting to blaze an new
trail where there is no precedent to work from -- you just pick a
figure, multiply it by the best guess of where the average household
and the middle quartiles are with respect to debt payments and income
and the amount losses and bankruptcies are ahead of startups and firms
indusrial firms and farms making profits -- no science here - more
like old fashioned weather forecasting - just to get the intitial
dividend amount.
Once the initial amount has been distributed it will become the number
that the rest of the economy adjusts to -- realizing that in the
short run the prices and supply are inelastic -- realizing that some
people will freeze their activity and hoard in fear of what is going
to happen -- but fortunately because purchasing power will be so
widely diffused they will not be able to paralyze the economy.
Adjustments will be made from there.
Now here is the message I put out last year - for comparison with the
above:
My Economic Program and Why Nothing Else Will Do
Dick Eastman
We are in hyper-Deflation -- like Argentinean hyper-Deflation rather
than 1923 German Inflation -- and so both spending cuts and tax
increases will only exacerbate economy failure. That is not to say
that government spending increases and tax cuts will help. Inflation
and deflation are not exact opposites of each other. Final product
prices do not fall in deflation. Quantity produced and employment
fall and wages fall. Government spending increases do nothing if they
are debt-financed -- they just add to the debt burden and
corporations know this if the little firms do not. And tax cuts are
also useless for reflating the economy for two big reasons, among
others. First, even with less tax penalty for production and
investment there is still no consumer demand to make any consumer
enterprise sufficiently profitable to be worth the investment.
Second, there is incentive to keep the cash because in a hyper-
Deflation dollars gain in purchasing power of foreclosed assets and
distress sale assets and privatized assets (because no one is making
enough income to tax to allow the government to get buy without
selling off assets). The creditor class, that is finance, finds it
more profitable to hold on to dollars in a hyper-deflation and so will
not invest their tax savings in American production which would hire
workers and ease the foreign trade imbalance. So, tax increase does
not good, tax decrease does not good, tax increase does no good and
tax decrease does not good -- that is, does not good for the domestic
economy and those constrained to make their livings in it. And of
course what government spending is not paid in taxes has to be
borrowed -- and paid back with compound interest. So what about
doing nothing? That also will not save us, because of net interest
drain giving us ever-worsening deflation -- because our money is
loans -- right now mostly debt-consolidation second mortgages and
mortgage refinancing, not business loans or construction loans. Our
money is loans -- not printing press money made by government as the
thoroughly dishonest Austrian School economists tell you. Our money
is loans and for every dollar of loan added to the flow of money in
circulation in the domestic economy there comes with it a subsequent
subtraction from the flow of that much principal plus compound
interest. So money in circulation shrinks automatically, even as
deflation kills off output. This is the deflationary spiral. Doing
nothing is as fatal as austerity measures.
Is there a solution?
Yes.
The solution is to shelve the system where our money is all loan
created checkbook money and switch to a system where we the government
provides each household -- each citizen -- with pure so-called "thin-
air" fiat money on a regular basis -- money that is simply received
like a tax-withholding refund check or a social security check or a
check from a rich aunt who loves your selflessly -- a check that does
not have to be paid back. All new money must be distributed in this
way. That will make the householder sovereign in his own country.
It will ensure that the economy is directed by consumer-demand pull,
rather than corporation-investment push which pushes us into wars and
boondoggle government spending programs or post-disaster
reconstruction which invites the absolutely corrupt super rich to
arrange disasters to clean up.
The four principal economic reforms of this populist proposal are 1)
repudiation of debt to international finance -- because the contract
was fraudulent, the conditions impossible to meet and fraud vitiates
all contracts. 2) switch to pure fiat national treasury money and the
elimination of the central bank and of fractional reserve banking --
banks will lend depositors' time deposit savings or they will not
lend at all. 3) The introduction of all new money exclusively
through the the household sector -- all purchasing power will
originate with a check or electronic deposit in consumer bank
accounts by fiat, rather than a debiting of someone elses account,
rather than a transfer of funds. If the people want public services
they will have to have their representatives arrange to tax them for
it. Government will not be permitted to borrow. 4) The corporation
will be done away with and replaced by the single proprietorship or
partnership structure with owners incurring full liability. Non-
voting stock may be issued to investors, through the internet, not
through Wall Street, which will no longer exist. 5) Foreign trade
will be balanced and never "favorable" -- we pay for our imports with
our exports. 6) foreign held dollars will not be allowed to enter the
US and buy up our land -- but will become a separate currency that
trades in its own right and can be used to buy up American corporation
assets located outside the US. The US economy will become
nationalistic. Americans will not own companies in other countries.
7) Foreign ownership of American soil production plants will be
regulated in the interests of the US, but in fairness to the foreign
owners -- but foreigners may not own land here, and that includes
expatriates. 8) Dual citizenship will not be tolerated -- and those
insisting upon citizenship in other lands will require a current visa
to stay here. 9) We will allow all drug addicts to obtain drugs at
cost from the US government -- this will end the drug trade and the
trillions of dollars laundered into international banks each year --
which will require a full scale war which to win will require all of
our troops at home.
These are the steps that I would use emergency powers of the President
to impose by the signing of executive orders during my Inaugural
Address. Executive orders that voters will be able to read in full
months before election day on Tuesday, November 6, 2012. I have
observed that whatever campaign promises don't get done right away,
never get done. It is the only way a reform president could every
possibly think of overcoming the solid wall of obstruction and
sabotage that vested criminal interests would impose to keep their old
rackets going.
My running mate is Max Lund. We have no party. We ask for a grass-
roots every-supporter for himself, campaign for getting an indpendant
on the ballot in states where write-in candidates are not permitted.
Every citizen is my campaign manager. Lobbyists need not apply. This
candidate is fixed in his goals. Non-establishment appointees --
mostly from the mid-west and west I might as well tell you now --
of my cabinet will take care of all other matters. I am not looking
for experienced people -- I am looking for people who know right from
wrong and common good from the usual class who always seek to profit
from corruption of the system.
I hope you will be with me in realizing these reforms on January 20,
2013.
Yours sincerely,
Dick Eastman
Yakima, Washington
> 2. Are taxes obsoleted immediately, gradually or not at all on a national scale? I understand maybe in cities there will be isolated taxes for use of public utilities or at least I think anyway
DE reply: Taxes continue as the only means of funding government. It
is the height of corruption to award Congress the power to spend money
into existence. The money must be created in the hands of the
citizens and the government - the representatives of the people - must
be elected by the people - and run for office on ample campaign money
from the pockets of the common people -- and when elected they will,
on behalf of the constituents - legislate the public services the
people desire at the expense of private goods. Withholding taxes will
be eliminated. The citizen will pay his taxes perhaps monthly or
quartery -- with itemization - available on the internet of how much
of his payment goes to this or that big item or category of small
item. The leisure time freed up by not having to work to pay usury
will be taken up in part with civics and the subject of public
financing. The people will soon be buying schools that they control
and that teach thrift and responsibility in both the public sphere and
home economics. If the people want the government then they must elect
people or participate in public themselves to vote the goods which
then everyone must pay for knowing exactly what they are paying for.
Political sovereignty stems from economic sovereignty. We are taking
econmic sovereignty from the financial sector and giving it to the
household sector. Also, economic sovereignty comes from the
origination of money and that is now to belong to the people. We will
also have our majority party in Congress abolish the corrupt practice
of separating legislation from appropriations and ways and means. No
public good will be legislated without the private cost being approved
along with it for all to see. This measure and the abolition of
deficit-financing will usher in the world's first truly populist
government.
_____
3. Do all citizens get a dividend payment - all ages? If so, will the
parents have the right to take child money until of legal age. I ask
to understand the possibility of baby booms for extra cash
DE reply: Today if an elderly person who had a child late in life
retires and receives social security there is additional payment for
the child, but the parent must indicate that the money was spent for
the child or put aside for the child - but we expect it to be spent
for the household. The parent is guardian and trustee and the child's
family is the parents family. Now this raises the question of people
having children to get more money for the family. The issue is
complex. First the incentive to have too many children is there.
Second, the birth of a child is not a burden for the community because
it means more purchasing power in the community. Third, under our
system wealth will be so distributed and the family's means of raising
children will so that they are assets to the community is greater.
Fourth, the intelligence and self-responsibility of people will
increase in an economy where labor is sought to operate thriving
business -- people will be in demand, they will not be scarce. See
who well the Japanese live in crowded conditions when each is taught
self-discipline and appropriate behavior etc. HOWEVER, AN ARBITRARY
RULE MUST BE MADE HERE: Some formula like one of the following:
Either a limit of three children with full social credit dividend
during their childhood lives - although a smaller amount can be
accumulated and saved for education or a start in life -- saved in a
government account that cannot be touched until the specified need -
or perhaps a medical emergency. This must be elaborated.
Another question is illegal aliens. I favor allowing aliens to work
freely in the US. There will be plenty of demand for labor for all.
Aliens will not receive social credit, which requires full
citizenship. However this will not be so big an issue, because the
economy will no longer be a sinking ship with people fighting each
other for the "lifeboat" of a job in a dwindling job market.
_____
4. What if a company is not registered with the Social Credit office?
Do they just not participate & how do you monitor if something is
consumed or purchased if the transaction is made without knowledge of
such or if a registered company makes a transaction without receipt.
How do you control regulating purchases of consumable good &
consumption of goods if they are not all registered & people crook the
system? Hope I have explained myself ok (seemed to have ranted on
there a lil)
DE reply: You have indeed read Douglas. My version is different. If
you are a citizenship and you bother to get a checking account and ask
the bank to handle your social credit account and that of your small
children, then you are in.
Most important I reject the Douglas rebate - the compensated rebate to
retailers for the just price -- as unworkable and undesirable and a
severe moral hazard if attempted. The American National Dividend
reform consists of the household dividend, fiat thin-air money, 100
percent reserve requirement lending (after the transition) by banks
who get their money from citizen time savings accounts -- lending to
entrepreneurs at one amount, say for example at 6% and borrowing for a
fixed amount of time from savers (with withdrawal penalty in force)
the bank earning the spread of 3% in this case - amounts varying with
risk and duration of the loan etc. THERE IS NO REGISTERED COMPANY IN
THIS 'AMERICAN POPULIST' VERSION OF SOCIAL CREDIT. The rebate and
compensated "just price" requires a police state to manage and
enforce. I am sorry I did not tell you that sooner -- I thought you
had read my stuff. (If you want the pure Douglas version I can
recommend some orthodox purist Douglas people. The system I am
describing is much simpler -- the Douglas plan I deem to be too
impossible to get started and too cumbersome and bureaucratic to keep
going. Also, the more rebate you have the less dividend you can
give. I say no. Here is a diagram I made telling the difference
between the two:
5. What if people are hired illegally & not registered on company
books? Does this affect dividend payments negatively?
DE reply: Good question. That is why I abandoned the involvement
with retailers and rebates and "just price" and auditors and rules and
fines and all that nightmare.
> 6. How will a Social Credit currency fair up on the international market? Will the currency have value, will it float as an international currency, etc
DE reply: The US will have domestic economic strength and build up
its domestic products so we will have the most innovative and
entrepreneurial economy -- not held down by rich privileged kids
whose idea of competition is to bankrupt the competition through
engineered deflations that kill demand while "daddy" in finance gives
"sonny" in a multinational cooperation all of the credit he wants to
crush the little honest guy who really has the better ideas. We will
become the people we once were -- I am not talking about race -
phooey on race - I am talking about the people that are shaped up by
a true land of opportunity - not opportunity for financial swindle
and monopoly practices, but real reward meeted out by the sovereign
consumer, the smart housewife, the bargain hunter, the quality seeker
- so that the best entrepreneur who satisfies the most per dollar of
cost will make the profit to do it again on a larger scale and the
lazy guy who inherited the business from his more energetic daddy will
go under unless he wises up and gets good at giving the people more
satisfaction for the dollar than the other guy. That is the economy
we all want, and that is the economy the conservatives only pretend we
have now - because they are all of those worthless heirs who are
unfit for competition and thus go to government and bankers to cut off
from credit the worthy non-elite outside-the-club workers.
> 7. How will Imports & Exports play a part in the Social Credit system with different currencies, prices, registering consumption, etc?
DE reply: The country will export its products and its resources and
these will earn the foreign money with which to buy up to that amount
of foreign goods. Shippers may extend commercial credit to transport
the goods, but they take the responsibility. The big problem is our
debt burden owed to foreign countries -- our repudiation will not be
without some settlement -- the foreign located assets and military
bases of the US in exchange for cancellation of our debt. Other
countries, if things go right, will be following our good example, and
they too will be looking for balanced trade rather than merchantilist
"favorable trade" -- favorable trade is anti-social behavior in the
community of nations.
> 8. Can you contract overseas services & expertise & pay these institutions & how does this play a role in the Social Credit system?
DE reply: Right now there are roughly ten to a hundred times as many
dollar denominated accounts and dollars outside the US domestic
economy than inside. We are already dead if this money all suddenly
came home to find something to buy. And that may happen any time with
the Rothschilds teaming up with the Rockefellers to buy US assets now
that they have all of our wealth uip for sale in the deflationary
depression they have engineered for us. So the job now as the job in
the future under American social credit is to keep that from
happening (and we know that neither Obama nor Romney nor free-
marketer Ron Paul will prevent that from happening.) So we will settle
our debts with the sale of American overseas holdings -- but at the
same time we wil start the permanent pattern of what our foreign trade
will be -- the balanced trade -- more or less barter among nations
according to comparative advantage in production -- tropical fruit
from the tropics and French fashions from France our grain and other
products to come will pay for our imports by the foreign currency we
collect in selling them. The currency market will no longer be the
speculative monster controlled by international thieves that it is
now, but will be conducted openly so that any person with Japanese yen
can sell that yen for dollars on the equivalent of E-bay -- we will
cut the Rothschilds out with the computer revolution. If a dollar
exists that a foreigner wants buy so he can buy an American good,
then let him do so freely. If a foreign currency can be bought for
dollars let anyone do so -- at the market price with the perfect
competion of perfect knowledge and perfect competition that we have
today. The problem of course is the big overload of foreign held
dollars -- and THAT may require that the new social credit be
separated from the old dollars, the old dollars that have been the
worlds reserve currency. The American people cannot be made victims
of that Reserve Currency -- and don't let anyone tell you that we
have been beneficiaries of that system. Only our deviant financial and
corporation elites have been beneficiaries -- and we are now fixing
their wagon with this reform. The American people have been victims
like everyone else -- look at the economic history of the US -- read
the book the Octopus or Jack London's The Iron Heel for a taste of
how the American people have suffered at the hands of Rothschild-
serving Wall Street (with Morgan, Baruch, Rockefeller etc being tools
Rothschild.) I believe the world -- Iceland, Ireland, Greece, Spain
right now, and the rest of the world soon enough -- will see that our
reform needs the cooperation of the other peoples of the world, not
their opposition. Other nations will follow our example. They will
throw out the libertarianism, the communism, the socialism, the labor
movement -- our program answers all of the problems those groups claim
to address but in reality do not.
Eventually foreign trade will go on as always -- except that
investment will no longer be international. If a country has a great
comparative advantage that has not been developed, let it be developed
from profits from sales abroad, not by foreign investment that can
come or go at the malicious and pirating whim of international
speculators.
_____
> 9. Does government provide a new made currency or a type of credit voucher different to the established currency?
The checking account deposit, will be the money of the land -- the
treasury will supply dollars which will simply be a check of the
united states government that does not need endorsing -- the
government will have its own checking account -- banks can buy dollars
from the government either at cost or for free (as the elected
legislators decide) - at first the Federal Reserve Notes of the
nationalized Federal Reserve will have to continue as money --
perhaps with a freeze to prevent foreign dollars to keep from flooding
in for conversion. Let the money salted away in the Camen Islands and
dollar denominated Swiss Bank Accounts remain a foreign reserve
currency on its own -- just take the name United States off the new
bills that are produced. They can't come back and muddy our new money
system. They will have the status of any other currency. If they
external dollars want in, they will have to buy our domestic dollars
at the going price.
I have a hunch the Rothschilds will not let their Federal Reserve
Dollars disappear -- so the foreign USD will become an international
currency superintended by the usural international banking crowd as
long as they can find a nation that will harbor them. Our dollars --
perhaps under a new name -- the Eagle has been used for our gold
pieces in the past -- or something else. The "cred" doesn't sound
quite dignified enough - but someone will find the right name.
DE reply:
> 10. How will Social Credit work globally with all countries having distinct currencies (will the currencies have same value or float)
DE reply: The usual currency market -- foreigners will buy our
goods by first selling their money for ours -- and we will buy their
goods by selling our money for theirs -- and the market will be super
efficient - done almost costlessly - in competitive computer exchange
systems that are very inexpensive to create and operate -- I am sure
it already exists -- only we will make it available to all. In fact
the US Department of Commerce could set up a currency exchange that
would allow people to buy foreign goods on the internet and exchange
currency costly at the going rate. The country with little to sell
and needing much from abroad will find that its money is very cheap on
the market and that buys very little foreign currency -- but
somewhere there will be a country with the opposite set of relative
abundance and need and they can sell -- anyone on the internet can be
an arbitrager and make the market super efficient. We no longer need
Rothschild for that -- in fact Rothschild has been the great force
preventing that advance. Once social credit is launced the world will
open up. They talk about free - trade now -- but it isn't. The debt
and the interest burden and the coming and going of investment capital
and the intimidation by international lenders that we are seeing all
over - that ends with Greece and Ireland - that is what we will be
rid of.
> 11. Does government give the dividend through the banks or by some postal or other similar service?
DE reply: The nationalized IRS will give up the machinery to the
Department of Commerce who will transfer the thin-air money to the
checking accounts of each citizen. Every citizen will have social
credit. The children's accounts can be pooled with the parents
checking account as mentioned above.
_____
> 12. What are the banks role in the Social Credit system? I think that they will only be allowed to loan what they have (no fractional reserve system), how will they make profits & generate additional income & will they still provide interest on savings, etc.
DE reply: Banks will offer checking, perhaps for a fee. But every
bank of the nationalized Federal Reserve system will be required to
offer an checking account to every citizen who does not already have a
social credit account. For most people it will be just one more
automatic deposit into their demand deposit account. The really poor
will have checking accounts for the first time and the banks may not
mind because they will have money to put into them and the businesses
they lend to will have the extra demand with which to earn a profit.
Certainly, no fractional reserve system. They will lend money - their
own and the money of those who have elected to put their savings in a
time savings account for a given rate of interest offered in exchange
for the privileged of the bank lending it out (with a penalty for
early withdrawal.) No runs on banks because there will not be a
collapsible money-multiplier money any more. Even if loans are
called, the savers will simply go to their banks and ask for their
money back -- but there can be no national event to trigger that
happening all over all at once - as with a stock market crash.
It is also part of the reform plan that I was offering that the US do
away with the corporation and replace it with the single
proprietorship and partnership structure only with full liability and
the ability of a firm to issue stock - common with no voting rights
and no liability - only to 49 percent. The full liability resting
with the controlling share holders, the 51 percent. Corporations are
creatures of the bankers, they are made up of the body parts of all
the little businesses they have destroyed with their deliberate market
collapses and deflationary depressions. The corporation is part and
parcel with the usury system and it must vanish with that
system.
_____
> 13. Do the super rich also get a dividend? I read that Douglas mentioned that anybody with monthly wealth exceeding 4 times the dividend may be exempt?? Not sure that I am fully correct
DE reply: Everyone gets a dividend. There aren't that many super
rich for it to matter.
_____
> 14. When a current Usury system changes to Social Credit, what happens to Government debt, legitimate debt? How does this play a part in the Social Credit system?
DE reply: "Legitimate" is a bogus concept - used to but kings
back on the thrones after the French revolution and Napoleon were
defeated. The goverment debt has all been accumulated in a great
fraud upon the people. Fraud vitiates all contracts -- and the
social contract supercedes -- see the preamble of the US Declaration
of Independence. There are no natural laws when it comes to the
economic system. Laws of economics yes. Natural consequences, yes.
But the rules are conventions and better conventions producing better
results are necessary right now.
_____
> 15. What is your opinion on criminals, etc receiving dividend payments ( I ask in relation to causing a rift in society about issues like this)
DE reply: It will lesson their incentive to be criminals
_____
> 16. The crisis is deflationary.. I get that now.. Thank you very much for clarifying that.... So the Euro will also become more valuable as the deflation continues? It is the same as the US?
DE reply: The pie shrinks with the purchasing power that pays its
production so prices are not reflective of the loss of output and the
decrease of consumption, living standards and the loss of household
and public wealth to foreign creditors.
_____
> 17. What happened in Germnay after WW2: There was hyper inflation wasn't there? How does it differ to today's crisis
DE reply: The hyper deflation followed world war one. It was
intentional. The victors wished to plunder the savings of Germans who
had bought bonds to fight the war. The bonds were still owing the the
German people and the international lenders did not want that much
money owing to the German middle class so they had the Reichsbank
flood the market with Marks. This destroyed the purchasing power of
the nominal savings of the war bonds, reducing them effectively to
zero.
Today the bonds (IOUs) are in the hands of the Moneyed elite and not
the middle class. The American middle class are deep in debt. Thus it
is in the interest of those who are hoarding all of their interest
earnings and bond wealth and dollar deposits to allow maximum
deflation to give them a windfall increase in wealth and also to
force bankruptcies so that land, businesses, homes, government assets
go to the creditors in a great wealth transfer. You never seen
inflation when Rothschild is holding the dollars. Remember, the Fed
is their bank, not the US government's bank. They are buying dollars
-- they are selling gold for dollars and they are selling their US
securities (better to call them "jeopardies" these days) for dollars
so they can get the windfall from deflation, so they can buy assets in
the distress sales that occur in a deflationary depression.
_____
> 18. Can free trade (without treaties, subsidies, etc) & free markets work with Social Credit?
DE reply: Free trade cannot work unless investment stays home and
labor does not migrate. If capital can flee - as it has - then all
of the investment will go to the country with an absolute advantage
from the investors point of view - and that place is China where the
people work for next to nothing, where there are few regulations,
labor agreements, environmental protections -- so Red China ends up
the biggest corporation in the world selling its totalitarian-regime
disciplined labor services to other corporations. This would not have
happened if Zhou Enlai and David Rockefeller -- through their
geopolitical architects, especially Henry Kissinger -- plan the
deindustrialization of the US to build up (and save from a Chinese
populist revolution) the Princelings of China, who are Triad organized
crime involved in drug trade around the world in alliance with the
City of London, Israel and the US ruling elites.
_____
> 19. Do you think that liberal idealistics go against Social Credit? I read somewhere that there may be some issues in regard to this. I think it was you or another Eastman... perhaps your brother?? Besides economic policy, I would really like to hear what you have against Ron Paul policy??
DE reply: Social credit is liberal. Ron Paul is not liberal. He is
libertarian - part anarchist and part libertine. Free trade as sold
by the Rothschilds Rockefellers the libertarians and the Austrian and
all hired economists in the think tanks, international organizations,
the US treasury and state department -- they are for a phony kind of
free trade. David Ricardo who developed the principle of mutual gains
from trade when nations are free to trade according to comparative
advantage stipulated a necessary condition for this outcome. CAPITAL
AND LABOR MUST NO BE ABLE TO MIGRATE -- as I stated in answer to
another question. If capital (investment in industrial plant and
machinery) is allowed to go the country with abosolute advantage in
production (because they allow a lower wage and the beating of
workers and the easy and cheap replacement of workers damaged in the
production progress so that you just fire them and forget them because
they have no protections from government ) then industry will go
there -- india and china are good countries for providing
corporations with absolute advantage because the people are
intelligent an capable and willing to work for next to nothing because
next to nothing is all they have known.
_____
> 20. Do you differ with Douglas that the compensated price is not necesary, & that it can be given as dividend? How does inflation come into play here? Do you think inflation must be controlled when rising too high or left to be?
DE reply: Yes, the compensated price rebate is a nightmare of
complexity and moral hazard in its administration - and it is a
replacement for putting purchasing power directly in the hands of the
household, where they might use it to start up their own business or
to pay someone directly to do work on their own property etc.
Douglas might have gotten his idea off the ground had he not put in
that nasty trouble maker the compensated price rebate.
> 21. Is a stock market still plausible & advisable if regulated in a Social Credit Economy?
DE reply: The corporation must go. The single proprietorship is the
answer. Loans to corporations can be immediately outlawed. Only
proprietorships can reveive loans. That will force corporations to
sell off portions of themselves to fund the remainder, reducing the
concentration of corporate monopoly power. Next we eliminate the
corporation structure completely -- forcing the breakup into little
propritorships and partnerships in forced auction. Like the day the
giant Bell Telephone complany was broken up. All Corporations are
conspiracies in restraint of trade. We must end the legal personhood
of corporations first thing. Then revise the fourtheenth amendment so
that it applies to former slaves only and not to corporations as it
has been interpreted as doing since it was written -- a true
conspiracy -- getting the worst law grafted to the freeing of the
slaves and to their right to vote etc.
> 22. Is saving a good idea with Social Credit or is it better to spend and consume?
DE reply: That is a householders decision. If they want to do
something big - start a business, leave a legacy, send someone to
college, live in luxury in old age -- then they will save -- while
others -- like people who want to own a home while their kids are
still young and living with them -- they can each make that possible
for the other with the bank as the intemediary. Nothing wrong with
that. That's freedom, isn't it?
> 23. What if there was a building that was needed to be constructed. This could be provided by government through funding and the building could get under way. What would happen if there were no expertise (builders, architects,etc) in the country to realise the project. Would it go undone or could you get expertise & resources from abroad?
DE reply: We still have tourists, and people who come here to study
and go abroad to study. We still can import and export goods and
services. Or the foreigner with the expertise can come here and
practice his profession or skill, and when he goes home convert his
dollars into the money of his land. None of that changes. But most
of all people will not be so paranoid of foreigners taking their jobs
because in a country with strong consumer demand that doesn't dry up
there is constant demand for labor - and people are not so jealous of
foreigners coming - but look on them as new customers -- because
people have money and spend it. They are not animals in the desert
fighting for the last drops from a drying up mud hole.
Dick Eastman
Yakima, Washington
oldickeastman at q dot com
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