Is Steve Keen about to "discover" A + B and Social Credit?

[Steve Hummel BenFranklinWasRight]

Here is his latest column for the Australian Business Spectator. He
talks about the conflicting theories of price (neo-classical/supply
and demand, versus cost plus) and mentions that a recent discovery
from his monetary software called Minsky is responsible for a change
in his thinking.

I have been a pain in the @ss posting about Social Credit philosophy
and mechanisms on his blog for well over a year. I'd like to think
perhaps some of it has sunk in. Maybe its just wishful thinking, but
who knows. He is the most vocal and stark economic iconoclast out
there currently. Here is an excerpt from the article:

"The reason that reality refuses to follow theory is that most goods
are produced in factories which engineers designed to work at maximum
efficiency when they are close to full capacity. So rather than
efficiency falling as output rises, it tends instead to rise: it’s
cheaper to produce each unit of output in a busy factory than in a
relatively idle one.

This empirical fact hasn’t interfered with economic theory at all – as
any current or past victim of an economics degree can attest. But it
does seem to decide the case in favour of the classicals for the real
world: prices must be set by a mark-up on costs, rather than by the
‘twin blades’ supply and demand.

That’s the opinion I held, until a crucial step in generalising my
model of Minsky’s Financial Instability Hypothesis implied that, at a
macro level, the two models are identical. I’ll get on to that – and
the role of prices in economic instability – in the next post in this
series."

http://www.businessspectator.com.au/article/2013/5/20/economy/seductive-super-models-supply-and-demand#comment-300661

[Jim Schroeder]

Right on Steve, keep on bugging him.  I think that many economists owe a great deal to Douglas but fail to acknowledge him

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Jim Schroeder

 

http://social-credit.blogspot.com/

 

 

[John G Rawson]

There is a considerable number of economists who have now come round to the need for government deficit spending, i.e. that there is a shortage of purchasing power in the economy.  They are appalled at what austerity is doing in Europe and the USA.
The next step is to get them to realise that it can be done without incurring debt. Some now think that debt doesn't matter because sovereign nations owe it to their own central banks. They are mainly of the MMT school.
Economic Reform Australia (ERA) is a melting pot for this.
Possibly the first some of them heard of Douglas was when I had an item published in their newsletter suggesting it was a disaster that his analysis had been overlooked for so long.
ERA is now considering seriously the principle of a National Dividend.
Results are got, not by sniping from the side, but by joining in and using a reasoned approach. It does work with people who are secure in their own ideas.
Regards.
J R

---

Date: Tue, 21 May 2013 07:32:16 -0600
Subject: Re: [socialcredit] Is Steve Keen about to "discover" A + B and Social Credit?
From: jimsch...@gmail.com
To: social...@googlegroups.com

[helge nome]

The problem with most economic thinkers and their thoughts is that they grossly oversimplify the nature of the elephant
they are dealing with.
Douglas was no exception.
Helge

---

From: johng...@hotmail.com
To: social...@googlegroups.com
Subject: RE: [socialcredit] Is Steve Keen about to "discover" A + B and Social Credit?
Date: Tue, 21 May 2013 21:40:13 +0000

[John G Rawson]

That's an inreresting "throwaway", Helge. 
Now please list five facts that led you to this conclusion.
J R 

---

From: helg...@hotmail.com

To: social...@googlegroups.com
Subject: RE: [socialcredit] Is Steve Keen about to "discover" A + B and Social Credit?

Date: Thu, 23 May 2013 08:43:08 -0600

[John Hermann]

Deficit spending is inevitable (as a long-term average) for the simple reason that it provides the only basis, within the current monetary framework, for maintaining growth in the supply of state fiat money.� Without this growth the demands of the private sector for credit money (currently produced by banks) and currency could not possibly be met, and deflation would set in.� It is significant that the secular trend (available from federal government budget statistics during the past 100 years) is for deficits to be the norm and for surpluses to be the exception.� In the U.S. for example, 85% of annual federal budgets are in deficit.� Moreover it is no coincidence that the magnitude of the annual deficit happens to be very close to the annual rate of growth in productivity, measured as GDP.� I would submit that there is a causal relationship between the two.�

In regard to John's insistence that central government deficits can be financed without incurring debt, I agree that this is true in principle.� However I would also point out that the public debt of a sovereign government is not really debt at all, because it never needs to be paid back.� That is, a sovereign government (by which I mean one which creates and issues its own currency) can roll over its public debt in perpetuity.� Moreover such public debt is mostly generated in response to any contraction in private sector debt (increase in private sector savings) -- that is, it is structural rather than discretionary.� And the reverse is true - when private sector debt increases, public sector debt is reduced.� Such is the dynamics of a debt-driven economy.� The debt that is responsible for doing serious damage to the economy is not the central government's public debt, but rather it is private sector debt - a conjunction of household debt, corporate debt, and foreign debt - one or more of which which will grow inordinately when there exist asset bubbles.� These bubbles inevitably burst at some stage, leading to significant economic contraction and social dislocation.

And in regard to John's point about a national dividend, I have recently proposed a scheme in which what I prefer to describe as an ongoing national dividend may be created and distributed to the entire population by a modification of the mechanism for implementing monetary policy.� The virtue of this scheme is that it allows money to grow in an endogenous manner.� In an endogenous system, the amount of money created is determined by the demand of the private sector for credit and currency.� Most monetary reformers seem to think that the only alternative to the present system is an exogenous banking system. Nothing could be further from the truth. With the exception of the Chicago Plan, almost all proposed full reserve systems envision exogenous money growth directly controlled by the government. I don't think an exogenous system is workable in the long run because it is too easily politicized and corrupted.

John Hermann


On 24/05/2013 12:13 AM, helge nome wrote:

The problem with most economic thinkers and their thoughts is that they grossly oversimplify the nature of the elephant they are dealing with.� Douglas was no exception.�� Helge

---

From: johng...@hotmail.com

There is a considerable number of economists who have now come round to the need for government deficit spending, i.e. that there is a shortage of purchasing power in the economy.� They are appalled at what austerity is doing in Europe and the USA.� The next step is to get them to realise that it can be done without incurring debt. Some now think that debt doesn't matter because sovereign nations owe it to their own central banks.�They are mainly of the MMT school.� Economic Reform Australia (ERA) is a melting pot for this.� Possibly the first some of them heard of Douglas was when I had an item published in their newsletter suggesting it was a disaster that his analysis had been overlooked for so long.� ERA is now considering seriously the principle of a National Dividend.� Results are got, not by sniping from the side, but by joining in and using a reasoned approach. It does work with people who are secure in their own ideas.��� Regards.� J R

---

From: jimsch...@gmail.com

Right on Steve, keep on bugging him.� I think that many economists owe a great deal to Douglas but fail to acknowledge him

On Sun, May 19, 2013 at 11:25 PM, Steve Hummel BenFranklinWasRight <ataus...@yahoo.com> wrote:

Here is his latest column for the Australian Business Spectator. He
talks about the conflicting theories of price (neo-classical/supply
and demand, versus cost plus) and mentions that a recent discovery
from his monetary software called Minsky is responsible for a change
in his thinking.

I have been a pain in the @ss posting about Social Credit philosophy
and mechanisms on his blog for well over a year. I'd like to think
perhaps some of it has sunk in. Maybe its just wishful thinking, but
who knows. He is the most vocal and stark economic iconoclast out
there currently. Here is an excerpt from the article:

"The reason that reality refuses to follow theory is that most goods
are produced in factories which engineers designed to work at maximum
efficiency when they are close to full capacity. So rather than

efficiency falling as output rises, it tends instead to rise: it�s

cheaper to produce each unit of output in a busy factory than in a
relatively idle one.

This empirical fact hasn�t interfered with economic theory at all � as

any current or past victim of an economics degree can attest. But it
does seem to decide the case in favour of the classicals for the real
world: prices must be set by a mark-up on costs, rather than by the

�twin blades� supply and demand.

That�s the opinion I held, until a crucial step in generalising my
model of Minsky�s Financial Instability Hypothesis implied that, at a
macro level, the two models are identical. I�ll get on to that � and
the role of prices in economic instability � in the next post in this
series."

http://www.businessspectator.com.au/article/2013/5/20/economy/seductive-super-models-supply-and-demand#comment-300661

[Wallace Klinck]

If you think that Douglas's analysis and recommendations were "oversimplified" over four decades of studying the issue then you obviously have not read much of the material published during that period.   Many people of substantive intellect found him too sophisticated to understand.  Perhaps you might demonstrate where he was led to "grossly oversimplify the nature of the elephant."    A mere assertion to that effect is hardly adequate.

Wally Klinck

[DANIEL KRYNICKI]

So we finally get to the heart of the matter.  How, therefore, can we be in a deflationary cycle at the same time that we experience price increases?  In trying to defend Douglas you adherents always ignore the obvious in you defenses.  Usury is an evil component in any monetary system.  If all that is available to finance a production run is interest bearing credit or hoarded capital, then the retail price of production's wares must always reflect the interest.  Where does this interest become available in consumer's pockets?  You say from the dividend.  But prices have risen.  The producers typically always want more return then they perhaps should be entitled to.  As purchasing power, the dividend means nothing to the wealthy.  Their wealth has always been the result of overcharging.  This is how they pay for their elaborate estates.  You are dealing with a clerisy here.  There is no negotiating.  You do one thing.  They will nullify what you attempt by doing another.

So at the same time that you have price inflation on goods and services, you will also have some segment in the economy in a deflationary cycle to finance the elaborate estates.  The losers will always be those who cannot have an effect on the rules of the game.  Changing the rules at the fundamental level is the only alternative.  Don't let Douglas lead you into the ditch.

Daniel Krynicki

[helge nome]

I think that I have spent plenty of time already, pointing out the shortcomings of the so-called "A+B Theorem"
The problem in this little discussion group is that its more assertive and aggressive members have decided to turn C.H. Douglas into
some kind of icon and appoint themselves as a theocracy based on this icon.
This is what happens in religious cults and has little to do with effecting any changes in the real world.
Helge

---

From: wmkl...@shaw.ca

Subject: Re: [socialcredit] Is Steve Keen about to "discover" A + B and Social Credit?

Date: Fri, 24 May 2013 03:35:02 -0600
To: social...@googlegroups.com

[Wallace Klinck]

Thanks for your contribution John (Herman):

For our practical consideration we can say that on the average increasingly unbalanced budgets have been present since the establishment of the Bank of England in 1694.  Of course this is inevitable because the system of of industrial cost-accountancy functioning in conjunction with a defective system of national accountancy generates ultimate prices more rapidly than it distributes effective consumer incomes, i.e., income capable of clearing the market of produced goods at the rate at which they are produced while simultaneously liquidating the financial costs of these goods.   The primary reason for this imbalance between prices and incomes is that the consumer is not credited for capital appreciation although the consumer is charged for capital depreciation through allocated charges added into consumer prices.   The means to pay these added charges has been prematurely collected from consumers and cancelled, never again to be effective consumer income.

Certainly, under the above circumstances it is patently clear that so-called "deficit spending" is increasingly inevitable (Douglas called "balanced budgets a "mathematical impossibility") if society is to continue living and progressing on a physical level.  The alternative would simply be a general suicide pact.  We require an expanding money supply in order that we can produce and consume and pay the producer so that he can pay his production costs incurred as bank loans.  This whole propaganda about the necessity to "live within our means" is expressed through financial lenses which present an evermore constricted view of our actual physical and psychological potential to provide our wants and needs.  No one can live beyond their physical or real means.  One cannot eat next year's crop or drive an automobile not yet produced.  Insanity!  Induced by worshipping an enumerated abstraction which records that we are increasingly "poor" in the midst of growing physical abundance.  "Balanced budgets" are simply part of a mug's game wherein the people are encouraged to produce in abundance and then prevented from enjoying the fruits of their efforts by an artificially induced scarcity of monetary demand which leaves financial costs hanging in midair -- and real assets collapsing into the hands of the waiting creditors, primarily banking institutions which create all of our "money" as debt supposedly owed to them and secured by our resources.  As has been said previously on this platform, Keynes himself is reported to have conceded that we will find increasing difficulty in financing current consumption without mortgaging future incomes.  He apparently saw no need to prescribe a viable answer to what he himself recognized as an intrinsic defective characteristic of our monetary arrangement.s

The consequence of the existing financial system is as you observe increasing State debt--which means of course increasing State control of the manner in which money is spent and resources are directed.  The public debt represents purchasing-power which has been wrongly filched from consumers in respect of capital costs which should not be reflected in prices and capital credits which have wrongly not been credited to consumers.  That is what the game is primarily all about--the centralization not only of real wealth but even more importantly of political power.  Being a Fabian Socialist, Keynes would understandably have a lack of concern to address the problem with the existing price-system--inasmuch as the enhancement of State power is a central Fabian objective.  This policy is one of gradually encroaching tyranny and is entire antithetical to a free society.

I cannot agree that the required adjustment to the current system of cost-accountancy can or should be accomplished in an endogenous manner because under the existing system of industrial accountancy where all payments are registered as financial costs the system can only become less financially self-liquidating.  Further, the basis for distribution of consumer wealth is becoming increasingly a right by virtue of the consumers'  mere existence as consumers--having less relationship over time to work contributed as labour becomes a shrinking relative financial cost factor of production.  At the core of Douglas's analysis was his concept of real as opposed to financial cost.  This concept held that the true or physical cost of production is rapidly falling and that the price-system should reflect this reality by a commensurate decline in financial prices.  Stable prices were no part of Douglas's advocacy.  Stable prices would simply sabotage the real advances in production efficiency.  What we have today is an expansion of incomes through the endogenous means of monetary expansion for the purposes of production and to maintain by coercion the culturally barbaric policy of so-called "full-employment", i.e., the denial to all citizens of the increasing Leisure which realistically is entirely possible and deserving.  That is, as per fascist and communist policy:  "You will work or you will starve." I agree with you that the control of monetary spending by the State is of the greatest concern.  As previously observed, this is what we have today on a grand and expanding scale.  But that spending gives the Government control over policy.  The Social Credit consumer credits issued as National Dividends and Compensated Prices are an inalienable inheritance  which removes from the State its claim to mobilize resources at its own discretion and places this power directly and increasingly in the hands of consumers.   The Social Credit policy of distribution is entirely different and rests on an entirely higher plane than the current methods of attempting to redistribute an increasing insufficiency.

Sincerely

Wally Klinck

On 2013-05-23, at 11:04 PM, John Hermann <her...@chariot.net.au> wrote:

Deficit spending is inevitable (as a long-term average) for the simple reason that it provides the only basis, within the current monetary framework, for maintaining growth in the supply of state fiat money.  Without this growth the demands of the private sector for credit money (currently produced by banks) and currency could not possibly be met, and deflation would set in.  It is significant that the secular trend (available from federal government budget statistics during the past 100 years) is for deficits to be the norm and for surpluses to be the exception.  In the U.S. for example, 85% of annual federal budgets are in deficit.  Moreover it is no coincidence that the magnitude of the annual deficit happens to be very close to the annual rate of growth in productivity, measured as GDP.  I would submit that there is a causal relationship between the two. 

In regard to John's insistence that central government deficits can be financed without incurring debt, I agree that this is true in principle.  However I would also point out that the public debt of a sovereign government is not really debt at all, because it never needs to be paid back.  That is, a sovereign government (by which I mean one which creates and issues its own currency) can roll over its public debt in perpetuity.  Moreover such public debt is mostly generated in response to any contraction in private sector debt (increase in private sector savings) -- that is, it is structural rather than discretionary.  And the reverse is true - when private sector debt increases, public sector debt is reduced.  Such is the dynamics of a debt-driven economy.  The debt that is responsible for doing serious damage to the economy is not the central government's public debt, but rather it is private sector debt - a conjunction of household debt, corporate debt, and foreign debt - one or more of which which will grow inordinately when there exist asset bubbles.  These bubbles inevitably burst at some stage, leading to significant economic contraction and social dislocation.

And in regard to John's point about a national dividend, I have recently proposed a scheme in which what I prefer to describe as an ongoing national dividend may be created and distributed to the entire population by a modification of the mechanism for implementing monetary policy.  The virtue of this scheme is that it allows money to grow in an endogenous manner.  In an endogenous system, the amount of money created is determined by the demand of the private sector for credit and currency.  Most monetary reformers seem to think that the only alternative to the present system is an exogenous banking system. Nothing could be further from the truth. With the exception of the Chicago Plan, almost all proposed full reserve systems envision exogenous money growth directly controlled by the government. I don't think an exogenous system is workable in the long run because it is too easily politicized and corrupted.

John Hermann

On 24/05/2013 12:13 AM, helge nome wrote:

The problem with most economic thinkers and their thoughts is that they grossly oversimplify the nature of the elephant they are dealing with.  Douglas was no exception.   Helge

---

From: johng...@hotmail.com

There is a considerable number of economists who have now come round to the need for government deficit spending, i.e. that there is a shortage of purchasing power in the economy.  They are appalled at what austerity is doing in Europe and the USA.  The next step is to get them to realise that it can be done without incurring debt. Some now think that debt doesn't matter because sovereign nations owe it to their own central banks. They are mainly of the MMT school.  Economic Reform Australia (ERA) is a melting pot for this.  Possibly the first some of them heard of Douglas was when I had an item published in their newsletter suggesting it was a disaster that his analysis had been overlooked for so long.  ERA is now considering seriously the principle of a National Dividend.  Results are got, not by sniping from the side, but by joining in and using a reasoned approach. It does work with people who are secure in their own ideas.    Regards.  J R

---

From: jimsch...@gmail.com

Right on Steve, keep on bugging him.  I think that many economists owe a great deal to Douglas but fail to acknowledge him

On Sun, May 19, 2013 at 11:25 PM, Steve Hummel BenFranklinWasRight <ataus...@yahoo.com> wrote:

Here is his latest column for the Australian Business Spectator. He
talks about the conflicting theories of price (neo-classical/supply
and demand, versus cost plus) and mentions that a recent discovery
from his monetary software called Minsky is responsible for a change
in his thinking.

I have been a pain in the @ss posting about Social Credit philosophy
and mechanisms on his blog for well over a year. I'd like to think
perhaps some of it has sunk in. Maybe its just wishful thinking, but
who knows. He is the most vocal and stark economic iconoclast out
there currently. Here is an excerpt from the article:

"The reason that reality refuses to follow theory is that most goods
are produced in factories which engineers designed to work at maximum
efficiency when they are close to full capacity. So rather than

efficiency falling as output rises, it tends instead to rise: it’s

cheaper to produce each unit of output in a busy factory than in a
relatively idle one.

This empirical fact hasn’t interfered with economic theory at all – as

any current or past victim of an economics degree can attest. But it
does seem to decide the case in favour of the classicals for the real
world: prices must be set by a mark-up on costs, rather than by the

‘twin blades’ supply and demand.

That’s the opinion I held, until a crucial step in generalising my
model of Minsky’s Financial Instability Hypothesis implied that, at a
macro level, the two models are identical. I’ll get on to that – and
the role of prices in economic instability – in the next post in this
series."

http://www.businessspectator.com.au/article/2013/5/20/economy/seductive-super-models-supply-and-demand#comment-300661

[Jim Schroeder]

Daniel,

 

It's basic cost accounting that prices rise based upon resources and effort involved in the production of goods and services.  Labour, capital and all costs are added together (with profit to firms) in order to determine the price charged to consumers. You and your ilk simply want to remove one portion of costs charged to consumers.  Why not remove all costs then and make everything "free"?

 

It's obvious from your emails that you don't understand basic cost accounting and the purpose of charging the consumer all the costs of production.

 

Banks have real costs, and the interest they charge is merely the price of the service they provide.  It is just as important that the banks charge a price for their service as any other organization that charges a price.

Further, the suggestion that we are in a "deflationary cycle" is the idiotic talk of Dick Eastman, who does not understand that the quantity theory of money is a myth, so he has to invent the fact that we are in a deflationary cycle in order to defend his position.  The truth of the matter is that we are experiencing inflation (and statistics demonstrate this fact) even though consumers have inadequate income to purchase all of production.  True Social Credit (with the A+B theorem) can explain this phenomenon, while Dick's "debt virus theory" cannot.  That is why he has to invent the lie that we are in a "deflationary cycle" even though reality does not demonstrate this assertion.

--
 
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[Steve Hummel BenFranklinWasRight]

The following two posts which I just put on Ellen Brown's blog at:
https://groups.google.com/group/public-banking/browse_thread/thread/93c1f6674fe74ab3/9bc79af0524353b2#9bc79af0524353b2

are restatements of what Wally and Jim have excellently explained
right above. They came about as a result of people not looking closely
enough and not remaining focused on essentials.

I must mention that these conclusions are misunderstandings of Social
Credit. One of the major problems of the current system is indeed that
it creates too much money IN THE FORM OF LOANS, and yet simultaneously
creates too little that is INDIVIDUAL purchasing power. (the result of
the current flawed conventions of cost accounting where labor costs
are only a decreasingly small fraction of total costs and yet ALL
costs must go into price.) So you have the confusing situation of
their being too much and too little money in the system ....at the
same time. The problem is resolved by creating more interest free
credit/money and directly distributing it to individuals AS A GIFT.
This not only (1) equates debt and incomes allowing the system to be
free flowing in fact instead of merely in theory, it also (2) reduces
the necessity to continually create TOO MUCH money IN THE FORM OF
LOANS (which is what Keynesian stimulus does, because its money that
is not only debt in the form of Bonds it is also funneled through the
economy before it reaches individuals and thus initiates the very
scarcity of incomes....that causes the problem) (3) appropriately
reduces the Banking system's power and influence on the individual and
the economy and most importantly (4) sets the individual free from any
extortionary economic power by the Banking system.

It also changes lots of other things like the underlying psychology of
the economic and monetary systems.

And that's all it does. :)


If we would look more closely at accounting and the effects of the
conventions and rules, specifically, of cost accounting we would cut
through 99% of the BS and error about money and monetary reform.

Money itself is basically accounting. Economics is basically ruled by
cost accounting. Now, the effects of the rules of cost accounting…have
wide ranging monetary effects on both businesses and individuals, and
also very deep psychological effects on individuals and society.
Approach monetary reform from these basics and you will avoid a lot of
confusion and strong and errant opinions.

On May 25, 9:15 am, Jim Schroeder <jimschroed...@gmail.com> wrote:
> Daniel,
>
> It's basic cost accounting that prices rise based upon resources and effort
> involved in the production of goods and services.  Labour, capital and all
> costs are added together (with profit to firms) in order to determine the
> price charged to consumers. You and your ilk simply want to remove one
> portion of costs charged to consumers.  Why not remove all costs then and
> make everything "free"?
>
> It's obvious from your emails that you don't understand basic cost
> accounting and the purpose of charging the consumer all the costs of
> production.
>
> Banks have real costs, and the interest they charge is merely the price of
> the service they provide.  It is just as important that the banks charge a
> price for their service as any other organization that charges a price.
> Further, the suggestion that we are in a "deflationary cycle" is the
> idiotic talk of Dick Eastman, who does not understand that the quantity
> theory of money is a myth, so he has to invent the fact that we are in a
> deflationary cycle in order to defend his position.  The truth of the
> matter is that we are experiencing inflation (and statistics demonstrate
> this fact) even though consumers have inadequate income to purchase all of
> production.  True Social Credit (with the A+B theorem) can explain this
> phenomenon, while Dick's "debt virus theory" cannot.  That is why he has to
> invent the lie that we are in a "deflationary cycle" even though reality
> does not demonstrate this assertion.

> On Fri, May 24, 2013 at 6:54 AM, DANIEL KRYNICKI <pipefight...@wowway.com>wrote:
>
>
>
>
>
>
>
>
>
> > So we finally get to the heart of the matter.  How, therefore, can we be
> > in a deflationary cycle at the same time that we experience price
> > increases?  In trying to defend Douglas you adherents always ignore the
> > obvious in you defenses.  Usury is an evil component in any monetary
> > system.  If all that is available to finance a production run is interest
> > bearing credit or hoarded capital, then the retail price of production's
> > wares must always reflect the interest.  Where does this interest become
> > available in consumer's pockets?  You say from the dividend.  But prices
> > have risen.  The producers typically always want more return then they
> > perhaps should be entitled to.  As purchasing power, the dividend means
> > nothing to the wealthy.  Their wealth has always been the result of
> > overcharging.  This is how they pay for their elaborate estates.  You are
> > dealing with a clerisy here.  There is no negotiating.  You do one thing.
> >  They will nullify what you attempt by doing another.
>
> > So at the same time that you have price inflation on goods and services,
> > you will also have some segment in the economy in a deflationary cycle to
> > finance the elaborate estates.  The losers will always be those who cannot
> > have an effect on the rules of the game.  Changing the rules at the
> > fundamental level is the only alternative.  Don't let Douglas lead you into
> > the ditch.
>
> > Daniel Krynicki
>

> > On May 24, 2013, at 1:04 AM, John Hermann <herm...@chariot.net.au> wrote:
>
> > the demands of the private sector for credit money (currently produced by
> > banks) and currency could not possibly be met, and deflation would set in.
>
> >  --
>
> > ---
> > You received this message because you are subscribed to the Google Groups
> > "socialcredit" group.
> > To unsubscribe from this group and stop receiving emails from it, send an
> > email to socialcredit...@googlegroups.com.

> > For more options, visithttps://groups.google.com/groups/opt_out.

[DANIEL KRYNICKI]

Forgive me for not consulting with a CPA before giving an opinion on faith and morals.  I'll be sure to give Gov. Rick Snyder the benefit of the doubt after he completes his straightening out of Detroit and Michigan with help from all his ivy league EFMs in the City of Detroit and Detroit's public school system.

[John Hermann]

On 25/05/2013 6:20 PM, Wallace Klinck wrote:

.... I agree with you that the control of monetary spending by the State is of the greatest concern. �As previously observed, this is what we have today on a grand and expanding scale. �But that spending gives the Government control over policy. �The Social Credit consumer credits issued as National Dividends and Compensated Prices are an inalienable inheritance �which removes from the State its claim to mobilize resources at its own discretion and places this power directly and increasingly in the hands of consumers. � The Social Credit policy of distribution is entirely different and rests on an entirely higher plane than the current methods of attempting to redistribute an increasing insufficiency.

The dividend scheme that I have recently proposed involves the creation of state fiat money by the central monetary authority in a non-inflationary manner (the mechanism by which this is achieved is explained in my proposal).� The creation of this fiat money allows the same quantity of credit money to be deposited in the bank accounts of every adult citizen -- on an ongoing basis.�

The overall mechanism does not involve direct Treasury spending of any sort.� Thus in this scheme the government has no ability to control or direct the distribution of the dividend payments.

Obviously the scheme would need to be set up by a legislative Act.� I will post the details within the next two days.

John Hermann

[Jim Schroeder]

You should actually try to learn how the cost and price system actually works, and why, before ou attempt to try to comment on them intelligently.  Otherwise, you're just making ignorant comments.

[Wallace Klinck]

On 2013-05-26, at 9:29 AM, Jim Schroeder <jimsch...@gmail.com> wrote:

I think, Jim (Schroeder) that Daniel (Krynicki) has demonstrated his psychological and philosophical inability to accept the idea of a Social Credit Dividend because he regards humans as irredeemably corrupt and inevitably tending to be what he calls "slackers."  His concern is therefore over scarcity and does not recognize such a phenomenon as abundance.  Obviously his conception of morality establishes an iron bond between morality and work.  He has expressed his belief in the need for harsh laws to discipline "slacker "deviance".

This should be an object lesson for others, demonstrating how those who have been brought up by the precepts of the Old Testament will inevitably be led to favour policies which centralize power to be exercised over the many by the few.  Social Credit recognizes a loving God as presented by the Christian precepts of the New Testament--not the the jealous and vindictive God of the Old.  Social Crediters recognize that humans are subject to error in both moral and practical matters but we believe that the Truth can make us free.  We do not believe that "Original Sin" means forever that mankind is innately committed to willful evil.  One would think that Daniel is either indoctrinated from youth or that he has become tragically jaded by some truly  unfortunate experiences or associations in life.  Daniel's attitude appears to be one which accepts scarcity  as the norm to be overcome only by enforced full-employment.  His recent statement that the German National Socialists enacted financial and economic policies that "worked perfectly"  reveals that the criteria he holds for successful economic policy are diametrically opposed to those of Social Credit.  The Nazis nearly arrested monetary inflation and instituted a rigid policy of compulsory work to eliminate "unemployment" for a brief time.  These achievements may have been an "improvement" for a population that had been ravaged by run-away price inflation and subsequent deprival of income through mass unemployment but they do not meet the criteria of Social Credit.  We do not believe in the Totalitarian State (the "Jack-boot" society) based upon work by coercion and rather than upholding full employment as a State policy we stand for the Leisure State.  While we stand for personal responsibility and high morals we  do not stand in judgement of our fellow citizens as Daniel appears to do with disdain for anyone who is "naive" enough to believe in the essential potential good of mankind.  Daniel appears to believe in the irredeemable evil of mankind while Social Crediters believe in the essential good in mankind which can be maximized by freedom and economic security with its removal of fear of non-survival.  We look toward the Kingdom incarnate.  If Daniel looks toward that end  it appears not to be in an incarnation of Christian principles in the organic affairs of mankind but in an abstract conception removed from real life upon this Earth.  What does "the Kingdom of God is within you" mean?

Daniel and others seem to be locked in a legalistic and abstract mono-obsession concerning what they term "usury"  leading them to concentrate their efforts on a frontal attack upon interest to the neglect of the root cause of its undesirable presence and effects at the final stage of production.  As you point out, Jim, industrial accountancy includes a complex of factors and not just a single one--and National or State accountancy is an over-riding factor that must be considered and altered before any proper resolution can be achieved of our financial and economic problems.  Social Credit does not contemplate materially changing the basic rules of industrial accounting but identifies a flaw in that accountancy that requires rectification by a corrective change in the principles and administration of National Accounting.

A central concept of Social Credit, emphasized by Douglas, is that final financial prices as determined in the conventional manner do not, as held by conventional wisdom, represent real cost.  Although they must be "paid" in full financial terms to the producer, the society as a whole must not pay for the entire costs of total production but only for that portion which represents current consumption.  This is to be achieved through a macro-economic adjustment established as social policy and administered by a State agency, e.g., a National Credit Office, operating at "arms-length" from the economy as such.  Such an agency would administer a National Credit Account but would not intervene in the practical administration of industry as such.  Thus, Social Credit defines two separate realms of accountancy, i.e., a "defective" one pertaining to the business enterprises of the nation and a State accountancy designed to correct the defect in the private or business sector.

Douglas's analysis indicates that the innate tendency of the price-system is to be deflationary because increasingly insufficient consumer demand is typically available to defray current production costs.    Technically, the A + B Theorem stops at this point.  This has led some economists to ask how, if Douglas is correct, can the economic system continue to function?  They apparently overlook Douglas's further explanation that continued economic activity is financed by continuing and expanding injections of new money created and issued by banking institutions as inflationary debt claims upon future production.  

Sincerely

Wally Klinck

[Wallace Klinck]

Obviously, John (Hermann) I cannot comment on your proposals prior to studying them--but I will look forward to doing so when you post them.

Sincerely

Wally Klinck

On 2013-05-26, at 8:30 AM, John Hermann <her...@picknowl.com.au> wrote:

On 25/05/2013 6:20 PM, Wallace Klinck wrote:

.... I agree with you that the control of monetary spending by the State is of the greatest concern.  As previously observed, this is what we have today on a grand and expanding scale.  But that spending gives the Government control over policy.  The Social Credit consumer credits issued as National Dividends and Compensated Prices are an inalienable inheritance  which removes from the State its claim to mobilize resources at its own discretion and places this power directly and increasingly in the hands of consumers.   The Social Credit policy of distribution is entirely different and rests on an entirely higher plane than the current methods of attempting to redistribute an increasing insufficiency.

The dividend scheme that I have recently proposed involves the creation of state fiat money by the central monetary authority in a non-inflationary manner (the mechanism by which this is achieved is explained in my proposal).  The creation of this fiat money allows the same quantity of credit money to be deposited in the bank accounts of every adult citizen -- on an ongoing basis. 

The overall mechanism does not involve direct Treasury spending of any sort.  Thus in this scheme the government has no ability to control or direct the distribution of the dividend payments.

Obviously the scheme would need to be set up by a legislative Act.  I will post the details within the next two days.

John Hermann

[Wallace Klinck]

And may I reply that you may think you have identified fatal flaws in Douglas's analysis of the price-system but I am not aware that  others are of the same opinion.  Your criticisms seemed to reveal that you simply did not understand the implications of the A + B Theorem and were answered by members of this group who were not to my knowledge convinced of the validity of your criticisms.  What matters in final analysis is what is correct and after a lifetime of considering these matters without and within the academic environment I am left with the distinct belief that, all considered, Douglas shines through the fog like a beacon.  Who else has come forth with such profound insights as he has offered?  Who?  This is a Social Credit forum and to represent the subject in a manner not consistent with the original intellectuals of the movement would be unsound and unethical.  Credit should be given where credit is due.  To suggest that supporters of Douglas are blind worshippers in a cult is both unfair and in error.  You will get unquestioning supporters in any social movement but many Social Crediters have come from educated and informed backgrounds of varied origin.  They have most often migrated toward Social Credit because of its intellectual and philosophical appeal amidst the various existing schools of thought.  

Wally Klinck

[helge nome]

Thank you for the reply Wally.
You are a true believer and you have my respect in that regard.
Some people have migrated to Social Credit and an awful lot of people have migrated away from it, as you know.
Why is that?

Helge

---

From: wmkl...@shaw.ca
Subject: Re: [socialcredit] Is Steve Keen about to "discover" A + B and Social Credit?

Date: Mon, 27 May 2013 23:01:05 -0600
To: social...@googlegroups.com

[Steve Hummel BenFranklinWasRight]

Wally,

The following is a refutation of Paul Grignon whose monetary reform is
referred to as "twice lent money" which is actually the primary
effect of the problem, (the piling up of debt) not its true cause. I
believe it also answers helge's objections. Correction of any
inaccurate statements in the following would be appreciated.

Paul Grignon: "I already responded and you simply ignore my arguments
and keep
repeating that total prices need to add up to total individual
incomes
when individuals are not the total market for the goods produced.
That makes ZERO sense to me."

Me: Okay, AGAIN caps are for emphasis only.
The problem we are facing really has nothing to do with the total
market...but rather with THE COST OF THE TOTAL MARKET....TO THE
INDIVIDUAL. Retail sale to an individual is the TRUE end to the
productive process and the FINAL end of cost.
When a business purchases any good, that is a cost of that
business....which they will pass on at one time or another...until
that cost is eventually liquidated at retail sale...by an individual.
Then, and only then is that the end of the matter of cost. Just
because a corporation buys consumer goods does not mean the end of
costs occurs. Wholesalers buy all manner of goods, put a mark up on
them and sell them at retail AT ADDITIONAL COST. Even if a business
purchases an intermediate good like a part or tool for the operation
of their business that is an ADDITIONAL CAPITAL COST...not an end
purchase. If an investment Bank buys furniture, art, computers and
male and female icons for the restrooms....the COST of that must be
and is passed on to their INDIVIDUAL customers.

Cost accounting and the individual and his/her income are
inextricably
linked. That is why Douglas's A + B theorem is valid. Cost accounting
correctly allows a business to defer their costs via depreciation,
but
incorrectly does not allow the individual to be credited with the
capital appreciation of the business. This bias toward business is
the
flaw in cost accounting. The effect of this lack of crediting the
individual is that individuals have less total incomes with which to
purchase ALL goods at retail...WHICH INCLUDE ALL COSTS...and the
result of this scarcity is in short order unpurchased production
piles
up and businesses slow or stop production....unless what?....UNLESS
MORE LOANS ARE ISSUED AND HENCE DEBT CONTINUALLY PILES UP. BUT WAIT.
THE PILING UP OF DEBT IS NOT THE CAUSE OF THE PROBLEM, BUT RATHER AN
EFFECT....OF THE TRUE CAUSE....WHICH IS THE SCARCITY OF INDIVIDUAL
INCOMES.

Now, as I said, I give you full credit for imagining at least part of
the solution to the problem....which is more than virtually every
economist has come up with, but it's only a partial solution and
sorry, the true cause AND effect you point at were discovered by
Douglas 90+ years ago.

On May 27, 10:01 pm, Wallace Klinck <wmkli...@shaw.ca> wrote:
> And may I reply that you may think you have identified fatal flaws in Douglas's analysis of the price-system but I am not aware that  others are of the same opinion.  Your criticisms seemed to reveal that you simply did not understand the implications of the A + B Theorem and were answered by members of this group who were not to my knowledge convinced of the validity of your criticisms.  What matters in final analysis is what is correct and after a lifetime of considering these matters without and within the academic environment I am left with the distinct belief that, all considered, Douglas shines through the fog like a beacon.  Who else has come forth with such profound insights as he has offered?  Who?  This is a Social Credit forum and to represent the subject in a manner not consistent with the original intellectuals of the movement would be unsound and unethical.  Credit should be given where credit is due.  To suggest that supporters of Douglas are blind worshippers in a cult is both unfair and in error.  You will get unquestioning supporters in any social movement but many Social Crediters have come from educated and informed backgrounds of varied origin.  They have most often migrated toward Social Credit because of its intellectual and philosophical appeal amidst the various existing schools of thought.
> Wally Klinck
>

> On 2013-05-24, at 9:12 AM, helge nome <helgen...@hotmail.com> wrote:
>
>
>
>
>
>
>
> > I think that I have spent plenty of time already, pointing out the shortcomings of the so-called "A+B Theorem"
> > The problem in this little discussion group is that its more assertive and aggressive members have decided to turn C.H. Douglas into
> > some kind of icon and appoint themselves as a theocracy based on this icon.
> > This is what happens in religious cults and has little to do with effecting any changes in the real world.
> > Helge
>

> > From: wmkli...@shaw.ca
> > Subject: Re: [socialcredit] Is Steve Keen about to "discover" A + B and Social Credit?
> > Date: Fri, 24 May 2013 03:35:02 -0600
> > To: social...@googlegroups.com
>
> > If you think that Douglas's analysis and recommendations were "oversimplified" over four decades of studying the issue then you obviously have not read much of the material published during that period.   Many people of substantive intellect found him too sophisticated to understand.  Perhaps you might demonstrate where he was led to "grossly oversimplify the nature of the elephant."    A mere assertion to that effect is hardly adequate.
> > Wally Klinck
>

> > On 2013-05-23, at 8:43 AM, helge nome <helgen...@hotmail.com> wrote:
>
> > The problem with most economic thinkers and their thoughts is that they grossly oversimplify the nature of the elephant
> > they are dealing with.
> > Douglas was no exception.
> > Helge
>

> > From: johngraw...@hotmail.com
> > To: social...@googlegroups.com
> > Subject: RE: [socialcredit] Is Steve Keen about to "discover" A + B and Social Credit?
> > Date: Tue, 21 May 2013 21:40:13 +0000
>
> > There is a considerable number of economists who have now come round to the need for government deficit spending, i.e. that there is a shortage of purchasing power in the economy.  They are appalled at what austerity is doing in Europe and the USA.
> > The next step is to get them to realise that it can be done without incurring debt. Some now think that debt doesn't matter because sovereign nations owe it to their own central banks. They are mainly of the MMT school.
> > Economic Reform Australia (ERA) is a melting pot for this.
> > Possibly the first some of them heard of Douglas was when I had an item published in their newsletter suggesting it was a disaster that his analysis had been overlooked for so long.
> > ERA is now considering seriously the principle of a National Dividend.
> > Results are got, not by sniping from the side, but by joining in and using a reasoned approach. It does work with people who are secure in their own ideas.
> > Regards.
> > J R

> > Date: Tue, 21 May 2013 07:32:16 -0600
> > Subject: Re: [socialcredit] Is Steve Keen about to "discover" A + B and Social Credit?

> > From: jimschroed...@gmail.com

> > To: social...@googlegroups.com
>
> > Right on Steve, keep on bugging him.  I think that many economists owe a great deal to Douglas but fail to acknowledge him
>

> >http://www.businessspectator.com.au/article/2013/5/20/economy/seducti...

>
> > --
>
> > ---
> > You received this message because you are subscribed to the Google Groups "socialcredit" group.
> > To unsubscribe from this group and stop receiving emails from it, send an email to socialcredit...@googlegroups.com.

> > For more options, visithttps://groups.google.com/groups/opt_out.

>
> > --
> > Jim Schroeder
>
> >http://social-credit.blogspot.com/
>
> > --
>
> > ---
> > You received this message because you are subscribed to the Google Groups "socialcredit" group.
> > To unsubscribe from this group and stop receiving emails from it, send an email to socialcredit...@googlegroups.com.

> > For more options, visithttps://groups.google.com/groups/opt_out.

>
> > --
>
> > ---
> > You received this message because you are subscribed to the Google Groups "socialcredit" group.
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> > For more options, visithttps://groups.google.com/groups/opt_out.

>
> > --
>
> > ---
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>
> > --
>
> > ---
> > You received this message because you are subscribed to the Google Groups "socialcredit" group.
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> > For more options, visithttps://groups.google.com/groups/opt_out.

[Steve Hummel BenFranklinWasRight]

Another post to Ellen Brown's forum in answer to some comments by a
poster named Steven:

Steven speaking to Paul Grignon: "On the other hand, I can find
absolutely no fault with your observation that money is NOT a thing in
itself' and should not be treated as such. This BTW is one thing upon
which you and Marc appear to agree."

97-98% of it is merely digital. The other 2-3% is bills and coins
which indeed is some thing. So to that degree I also agree with this.

"The ONLY way money created as debt can genuinely be repaid is for
the borrower to create enough real wealth to repay the debt - and
really, ANY money is debt,..."

Not correct. If an agency of government or some other lawfully granted
body was given money creation rights they could create a gift of money
(in other words that did not have to be paid back) that would cancel
any debt it was applied against. This is understanding the true
digital nature of the money system. Money DOES NOT HAVE TO BE A DEBT.
It can be Grace, a gift.

"Anyone trying to find fault with AND FIX our broken monetary system
solely on the basis of abstract mathematical (read 'accounting' as
well) laws is doomed."

Not correct. And who's trying to do that? Not me. The distinction that
is being missed here is that Social Credit's conclusions are based on
THE COMMERCIAL/ECONOMIC REALITIES.....of cost accounting, NOT ON
THEORIES DERIVED FROM.....PRIOR THEORY....like the Velocity THEORY of
money. Now, taking those REALITIES, one can also theorize (which IS
after all an acceptable thing to do...after you've honestly looked at
all of the relevant data) about the SYSTEMIC, that is CONSTANT,
effects that a commercial reality like cost accounting has on total
INDIVIDUAL incomes and total PRICES.....which indeed are exactly the
things that cost accounting....EFFECTS. I don't think there is any
flaw in that logic, and hence any mystification.....at all.

" Economic life is a dynamic process."

I agree with that.

"Attempting to diagnose its problems as if all the pieces
could be moved around in accordance with abstract laws is doomed to
failure..."

As I just showed, Social Credit is not using abstraction until it is
proper to do so. Its observations are correctly taken from empirically
verifiable data and from the correct assessment of the nature and
effects of a part of commercial reality, and then a theorem (A + B) is
postulated.....which has not been (honestly) refuted......very likely
because....it is true.

PLEASE let me emphasize here that I'm not trying to make anyone wrong
in an attacking sense. Please CAPS are for emphasis only. Everyone
here is obviously WAY above normal intelligence and well intentioned.
Let us get to the "real nitty grittys" of this problem and hopefully
work together. The issue is too important not to.

On May 27, 10:01 pm, Wallace Klinck <wmkli...@shaw.ca> wrote:

> And may I reply that you may think you have identified fatal flaws in Douglas's analysis of the price-system but I am not aware that  others are of the same opinion.  Your criticisms seemed to reveal that you simply did not understand the implications of the A + B Theorem and were answered by members of this group who were not to my knowledge convinced of the validity of your criticisms.  What matters in final analysis is what is correct and after a lifetime of considering these matters without and within the academic environment I am left with the distinct belief that, all considered, Douglas shines through the fog like a beacon.  Who else has come forth with such profound insights as he has offered?  Who?  This is a Social Credit forum and to represent the subject in a manner not consistent with the original intellectuals of the movement would be unsound and unethical.  Credit should be given where credit is due.  To suggest that supporters of Douglas are blind worshippers in a cult is both unfair and in error.  You will get unquestioning supporters in any social movement but many Social Crediters have come from educated and informed backgrounds of varied origin.  They have most often migrated toward Social Credit because of its intellectual and philosophical appeal amidst the various existing schools of thought.
> Wally Klinck
>

> On 2013-05-24, at 9:12 AM, helge nome <helgen...@hotmail.com> wrote:
>
>
>
>
>
>
>
> > I think that I have spent plenty of time already, pointing out the shortcomings of the so-called "A+B Theorem"
> > The problem in this little discussion group is that its more assertive and aggressive members have decided to turn C.H. Douglas into
> > some kind of icon and appoint themselves as a theocracy based on this icon.
> > This is what happens in religious cults and has little to do with effecting any changes in the real world.
> > Helge
>

> > From: wmkli...@shaw.ca
> > Subject: Re: [socialcredit] Is Steve Keen about to "discover" A + B and Social Credit?
> > Date: Fri, 24 May 2013 03:35:02 -0600
> > To: social...@googlegroups.com
>
> > If you think that Douglas's analysis and recommendations were "oversimplified" over four decades of studying the issue then you obviously have not read much of the material published during that period.   Many people of substantive intellect found him too sophisticated to understand.  Perhaps you might demonstrate where he was led to "grossly oversimplify the nature of the elephant."    A mere assertion to that effect is hardly adequate.
> > Wally Klinck
>

> > On 2013-05-23, at 8:43 AM, helge nome <helgen...@hotmail.com> wrote:
>
> > The problem with most economic thinkers and their thoughts is that they grossly oversimplify the nature of the elephant
> > they are dealing with.
> > Douglas was no exception.
> > Helge
>

> > From: johngraw...@hotmail.com
> > To: social...@googlegroups.com
> > Subject: RE: [socialcredit] Is Steve Keen about to "discover" A + B and Social Credit?
> > Date: Tue, 21 May 2013 21:40:13 +0000
>
> > There is a considerable number of economists who have now come round to the need for government deficit spending, i.e. that there is a shortage of purchasing power in the economy.  They are appalled at what austerity is doing in Europe and the USA.
> > The next step is to get them to realise that it can be done without incurring debt. Some now think that debt doesn't matter because sovereign nations owe it to their own central banks. They are mainly of the MMT school.
> > Economic Reform Australia (ERA) is a melting pot for this.
> > Possibly the first some of them heard of Douglas was when I had an item published in their newsletter suggesting it was a disaster that his analysis had been overlooked for so long.
> > ERA is now considering seriously the principle of a National Dividend.
> > Results are got, not by sniping from the side, but by joining in and using a reasoned approach. It does work with people who are secure in their own ideas.
> > Regards.
> > J R

> > Date: Tue, 21 May 2013 07:32:16 -0600
> > Subject: Re: [socialcredit] Is Steve Keen about to "discover" A + B and Social Credit?

> > From: jimschroed...@gmail.com

> > To: social...@googlegroups.com
>
> > Right on Steve, keep on bugging him.  I think that many economists owe a great deal to Douglas but fail to acknowledge him
>

> >http://www.businessspectator.com.au/article/2013/5/20/economy/seducti...

>
> > --
>
> > ---
> > You received this message because you are subscribed to the Google Groups "socialcredit" group.
> > To unsubscribe from this group and stop receiving emails from it, send an email to socialcredit...@googlegroups.com.

> > For more options, visithttps://groups.google.com/groups/opt_out.

>
> > --
> > Jim Schroeder
>
> >http://social-credit.blogspot.com/
>
> > --
>
> > ---
> > You received this message because you are subscribed to the Google Groups "socialcredit" group.
> > To unsubscribe from this group and stop receiving emails from it, send an email to socialcredit...@googlegroups.com.

> > For more options, visithttps://groups.google.com/groups/opt_out.

>
> > --
>
> > ---
> > You received this message because you are subscribed to the Google Groups "socialcredit" group.
> > To unsubscribe from this group and stop receiving emails from it, send an email to socialcredit...@googlegroups.com.

> > For more options, visithttps://groups.google.com/groups/opt_out.

>
> > --
>
> > ---
> > You received this message because you are subscribed to the Google Groups "socialcredit" group.
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> > For more options, visithttps://groups.google.com/groups/opt_out.

>
> > --
>
> > ---
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> > To unsubscribe from this group and stop receiving emails from it, send an email to socialcredit...@googlegroups.com.

> > For more options, visithttps://groups.google.com/groups/opt_out.

[Jim Schroeder]

As you demonstrate time and again Helge, it's not the quantity of supporters, it's the quality.

[Steve Hummel BenFranklinWasRight]

By the way, just to make things clear. I think helge's objections are
not actually relevant to Social Credit theory because they are
identical to Paul Grignon's.


Here is another response of mine to the poster Steven:

Steven: " let state at the outset that I don't think anyone looking
at the world as it really is can argue with the
need for a Social Credit"

I'm happy with that. :)

“But I am also not interested in providing a Social Credit / gift just
to balance the books, i.e. so those with money can continue to pile up
more of it - especially if you couple it with the idea of making money
'rot'. In the end, people and societies have to ask themselves "How
much do I really need, i.e. what really is wealth?" If you don't in
short order you will have a world full of money / social credit / debt
and no world.”

I understand this concern. However, it's important to understand that
paying off at least the huge housing debt overhang that we currently
have not only liberates families from debt slavery and frees up
purchasing power for them...but also actually reduces a very large
income stream for the Banks that irresponsibly lent that money out.
One of the beauties of CONTINUALLY placing more/adequate purchasing
power into the hands of individuals is....it actually will not only
replace the necessity for them to borrow in order to meet ever rising
prices...it will tend, especially after having been trapped in debt
slavery, to restrict their borrowing...because now they can actually
have most of what they want on a continuing basis...without doing so.
And sure people might ultimately borrow more, but as the dividend is a
variable amount based on actual consumption FREELY CHOSEN by
individuals and the discount is based on the fractional difference
between the cost of consumption (incomes) and the cost of production
(prices)...purchasing power will equivocate anyway. And you could use
a hard and fast commonsense regulation like you can't borrow more than
say 10% of your dividend amount, which would prevent imbalance and
inability to service such debt. Dynamic balance....of the entirety of
the system and throughout its productive course...that is the real
capitalism, the real free market theory...that libertarians can
worshipfully only believe is possible, with the system we have
presently.

The money system is creditary in nature, that is it can cancel itself
out. A gift can cancel debt, and a gift...does not have to be paid
back.

The ultimate direction money will tend to evolve toward, with a Social
Credit system and the increasing efficiencies of technological
advance, is that of a ticket for the distribution of production.

"[Steven] Exactly WHAT are those COMMERCIAL/ECONOMIC REALITIES:......"

First, my use of the word REALITIES was actually meant to emphasize
the reality of empirical accounting data, and yes also to emphasize
that this data was what Social Credit (indeed) bases its conclusions
on. Second, thank you and kudos to you for making that distinction.

I agree with both your #1 and #2...but sorry, not with your
conclusion. The digital/creditary nature of the money system itself,
and the addition of the gracious nature of the financial paradigm of
the free gift supercedes that math, and allows for a continuous flow
to occur.





On May 29, 2:31 pm, Steve Hummel BenFranklinWasRight

> ...
>
> read more »

[Steve Hummel BenFranklinWasRight]

Posted to Steve Keen's blog:

Pro­fes­sor Keen:
The fol­low­ing is a link to a chap­ter in a book enti­tled Aladdin’s
Lamp: The Wealth of the Amer­i­can Peo­ple writ­ten by Gorham Mun­son
pub­lished in 1945

https://socialcredit.googlegroups.com/attach/e40b8cd05e403b7a/Aladdin%27s+Lamp–Gorham+Munson+CH7-Creeping+Error.pdf?view=1&part=4

It con­tains sev­eral pas­sages that are almost word for word from
some of your lec­tures and writ­ings. Phrases about “rates of flow”,
“It is because they take a sta­tic view of eco­nom­ics.”, “It is then
by an expan­sion of bank loans (an expan­sion of debt) that the eco­
nomic sys­tem keeps going.…”.
I challenge you to read the entire chap­ter with an open mind. Thank
you.


On May 29, 2:31 pm, Steve Hummel BenFranklinWasRight

> ...
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[helge nome]

So true, Jim, so true.
Helge

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Date: Wed, 29 May 2013 19:29:01 -0600

[Jim Schroeder]

I'm glad we agree, Helge.

[Wallace Klinck]

Helge,

Just what is the logic of saying that some people have migrated to Social Credit and and "awful lot" have migrated away from it I would not know.  What basis have you for saying that a lot of people have migrated away from SC, Helge.  If you are talking about a social electoral mass that may have given their "allegiance" to a label representing something  they never understood I suppose that might make some kind of sense.  Serious-minded people who have engaged themselves in a thorough investigation of study of the subject usually, I believe, become life-long advocates whose lives are profoundly changed by the knowledge they have discovered.  One notable example of a prominent defector was the Very Rev. Hewlett Johnson, Archbishop of Canterbury who had been a major rising spokesman for the SC movement and then moved far to the so-called "Left" to become a more or less unabashed apologist for the Soviet Union during a period of its worst repressions.  People may drift from Social Credit because at heart  they do not believe that people either can or should be free.  Some believe that only highly controlled and planned society can function in a successful manner--and their concept of successful does not meet Social Credit criteria.  Whether motivated by a misguided idealism or a raw desire of power by which to coerce they fellow men they distrust or oppose individual freedom.  They have a policy problem because they have a philosophical problem.  Some are simply not up to dealing with sophisticated thought processes and never realize the far-reaching and profound nature of Social Credit.  They are easily confused by the alleged refutations of orthodox critics whose advice they are prone to take without question because of their supposed "status" in the academic world, etc.  Some people think that people develop character by suffering and that they should suffer--their minds often having been insinuated or impregnated with the notion that this constitutes some Divine plan for mankind.  Some think that Mankind is irredeemably evil and is not capable of living a moral and desirable life--and so must be strictly governed and coerced.  Some are jaded by the many failures of human society and have no faith that anything truly constructive can be done by man.  (Ernest Manning's declared reason.)  Some are simply so consumed with the necessity of keeping body and soul of self and family together economically that they have neither time nor energy to extract themselves from their slavery for higher mental activity.  Some decide to try and "beat the system" by themselves becoming engaged in the "rat race" and/or the merry business of trying to move ahead at the expense of others through unethical financial and other manipulation and machinations.  Overall a general fear of insecurity often brings out an attitude of "the Devil take the hindmost and I am looking after myself" while " the fools who believe in social ideals and moral principles can fend for themselves."  Generally, those who may drift away from a casual and/or superficial contact with Social Credit have never really understood its profound implications or moral imperatives sufficiently to be bound by them.  War has proved an overriding issue which has demanded the full resources of the nations and during wars money is in relative abundance so that people think they are in relatively good times--provided they are not suffering the direct consequences of war.  If they are not starving or appear not to be facing economic privation, as they understand the matter, their minds are drawn away from idealistic matters such as economic and social reform and they concentrate their efforts on a false belief that if they "work hard" and can outsmart their neighbour they and their families will manage to survive and perhaps even prosper.  They imagine that so long as they have a "job" they will came as close as possible to the "Promised Land."  They do not serve God but Mammon although they often have no significant conscious awareness of what they are really doing.  If they have no disciplined understanding of why things are as they are or of how they might well be altered they have no conscious motivation to seek reform.  One might go on analyzing the reasons why people might drift away from Social Credit or never consider it in the first place.  But i would challenge vigorously any suggestion that those who do become steeped in the subject are numerous in defecting.  For those who may have had a superficial interest the question is obviously irrelevant in any case.  Probably for those who think at all the essential problem for them with Social Credit is probably most often its promise for increasing leisure with the prospect, especially for their neighbours, of people "getting something for nothing" which they erroneously interpret as being at the expense of others.  They do not know either the meaning of, the basis of, or the potential for, Abundance.  They lack spirituality and are blinded by materialism--abiding in the darkest recesses of this world, misguided by the perverse powers that prevail over the thought processes of Man.  

You are right in observing that I am a "true believer."  I hope that that faith rests on a firm foundation.

i think that this is about all that need be said on the matter.

Wally Klinck

[John Hermann]

Apologies for the delay in forwarding this promised item -- attributable to major problems with my computer, which hopefully are now resolved.    JH

Monetary Policy Alternatives and a National Dividend
John Hermann

Introduction
      The proposals outlined below describe in a general way how open market operations (OMO) by a central monetary authority - which in the modern world is usually identified as the central bank (CB) - may be replaced by alternative procedures for conducting monetary operations.  The alternative procedures here envisaged could be incorporated within any integrated monetary reform package, and their usefulness would be most apparent within the context of a full reserve system.  However this is not a proposal in support of full reserve banking (or its equivalent).  The latter should be considered on its own merits, including resolving the problem of how a full reserve system might be able to accommodate capital accumulation.
      The complementary reforms that are considered here distribute any necessary new money injected into the economy by the actions of the CB in a fairer, more equitable and more productive way than currently operates. They entail placing this money directly into the bank transaction accounts of all citizens, rather than into the bank accounts of bond dealers. This money is more likely to be spent on goods, services and the essentials of life than on the purchase of interest-bearing financial assets. I like to describe the money so distributed as a National Dividend. 
      The idea of a national dividend seems to fit in with the proposals of many monetary reformers, as well as the reform prescriptions of the Georgists and the Social Crediters.  I also recognize that the latter are not only concerned with equity issues in relation to the distribution of new money, but also with cost-price relationships. 
      It is regrettable however that some monetary reformers seem to be unaware of the necessity to recapture (conventionally this is via taxing, and perhaps borrowing) most of the money placed into the economy by central government spending, in order to keep a lid on inflation.      

Definitions
      Monetary policy entails changing the volume of money accessible to the private sector without necessarily changing the overall financial wealth of the private sector, and provides for their currency and credit money requirements.  In an endogenous money system, such changes are implemented via the mechanism of keeping the rate of inflation within prescribed bounds.  
      Fiscal policy entails changing the overall wealth of the private sector without directly changing the volume of accessible money, in order to keep aggregate demand within acceptable bounds.
      Liquid assets are a subset of private sector wealth - the conjunction of money accessible to the private sector and assets of the latter which may be easily and speedily converted into accessible money.

The Alternative Proposals
      Before describing the proposals in detail, it is relevant to note that the prevailing monetary policy mechanism of OMO is very slow to operate - anywhere from 6 to 12 months for the effects to filter through the system.  The proposed alternatives are much faster, since money is distributed within the productive part of the economy in a direct and widespread manner, and does not require to be diffused down from the financial investment sector.
      Also it is essential to recognise that these proposals are not an exercise in fiscal policy (via financing government activities), but rather, they are different ways of operating monetary policy. 
In this context it will be useful to distinguish between the central government's budgetary balance and the net financial balance for the economy as a whole, taking into account the monetary operations of the CB.  Thus it would be possible, for example, to have a budget surplus along with a net financial deficit.  One way or another, a net financial deficit (on average, over the longer term) is recognised by many financial economists to be essential for the healthy operation of a modern economy. 
      The basic mechanism for operating monetary policy is to use the tool of interest rate manipulation as a means of accommodating the monetary needs of the economy as a whole (in particular the demand for credit money and the demand of the public for legal tender - coins and notes) in an endogenous manner.  The alternative is to attempt to control the money supply in a more direct manner - exogenously.  The latter is certainly possible, and has been advocated by many monetary reformers, however there is a price to be paid for it - namely, the organs of the state (central bank and government) would lose all control over interest rates.    
      Moreover such interventionism, without setting in place adequate checks and balances, would encourage and allow governments to create large quantities of money in an election year in order to accommodate their election promises.  Such an outcome is not inevitable, but it is a potential danger which needs to be adequately addressed.  An endogenously operated money system removes the possibility and danger of the corruption and politicization of the creation and distribution of money by the organs of the state.

Proposal 1:   Fiscal deficit model

    This proposal is a modification of the prevailing OMO model, which relies on Treasury issuing securities to the private sector.  Its general features are:

1.  The central government Treasury would create and maintain a special portfolio of securities to which the CB would have access -- guaranteed by a legislative Act.  Let's call this the monetary policy securities portfolio (MPSP).
2.  These securities would be unavailable to Treasury for the purpose of sale to the private sector.
3.  The CB would have the power to acquire the MPSP securities for its own assets portfolio at its discretion, and would pay for them by creating credits in a special CB account, called the monetary policy spending account (MPSA).
4.  The MPSA would be inaccessible to Treasury for the purpose of authorising Treasury spending.  
5. There would be no direct budgetary implications, and these operations would not be represented in Treasury's receipts or expenditures.
6. However, interest received by the CB from these assets would be credited to Treasury's CB account.  
7.  The CB would pursue its monetary policy objectives by selling securities from its assets portfolio to the private sector as and when appropriate, and acquiring securities from the MPSP (rather than from the private sector), as and when appropriate.  
8.  Bond dealers would be able to buy securities from the CB, but would not be able to sell them to the CB. 
9.  Bond dealers would be able to sell government securities to anyone else willing to buy (i.e. other than the CB). 
10.  The MPSA credits would authorise the CB to create state fiat money for the purpose of financing such (non-Treasury) spending options as (a) direct payments to all citizens (a type of national dividend), (b) direct payments but only to taxpayers, (c) payments to the unemployed and/or welfare organizations, and (d) a discount (paid by the CB) on withdrawals of currency from depositories, up to a (variable) monthly limit.
11. Payments by the CB to the private sector do not need to be made at irregular intervals of time; it is possible to implement a mechanism in which regular payments are made with varying payment amounts (the variation in payment amounts reflecting the monetary policy decisions).
12.  Within the context of a fractional reserve banking system, the payments would be modest.  However the payments would be expected to be larger by more than an order of magnitude for a full reserve banking system (or its equivalent).
13.  My preferred mechanism for payments to the private sector is a national dividend scheme in which the CB credits the bank transaction accounts of citizens with payments on at least a monthly basis (in much the same way that interest is added to interest-bearing accounts today). As virtually the entire adult population possesses such accounts, this would be a non-discriminatory and efficient way of distributing a national dividend.
14.  There would be no net impact on Treasury's general CB account, since any interest received by the CB from Treasury would be returned to Treasury within a prescribed time-span.  The overall mechanism does not involve direct Treasury spending of any sort.

Proposal 2:  A public-debt-free alternative

A more radical approach than the above to implementing monetary policy - by the manipulation of interest rates - is for the central government to abandon issuing debt securities altogether. Thus Treasury would simply cease issuing bonds and other securities to the private sector.  And of course a mechanism would need to be developed for suitably phasing out the current system and phasing in the new system, in order to avoid financial chaos and ensure that existing bond holders are not financially disadvantaged.  It is not my intention to discuss this important issue here.

(a) Fiscal balance model

In the first alternative model for this approach, it is required that central government spending will be exactly matched by receipts obtained from taxes and other sources of income (i.e. other than from public borrowings, which would not be permitted).  The CB would manipulate interest rates, to ensure that they fall within a prescribed range, by the mechanism of direct but variable payments of newly created money into the bank accounts of citizens.  These dividend payments would necessarily increase the reserves held by commercial banks commensurately.  This approach would be more limited than proposal no 1, in that it provides no obvious option for withdrawing reserves (without changing the wealth of the private sector) should the CM deem this to be necessary at any stage.  A supplementary mechanism would need to be devised in order to provide this option - not an easy task. 

(b) Fiscal surplus model

One way of getting around the limitations imposed by the fiscal balance model is to implement a model in which there is a structural fiscal surplus, together with regular dividend payments by the CB to citizens' bank accounts (guaranteed by a legislative Act), and sufficient in magnitude for the purpose of pulling the net financial balance back into deficit.  On average a net financial deficit is essential for any growing economy, as mentioned earlier.  However the 'fiscal surplus' model would give the CB greater short-term flexibility in regard to operating monetary policy.

General Remarks

      There is no point in attempting to replace the present mechanism for operating monetary policy with an alternative unless the latter presents clear and demonstrable advantages.  In the current proposals, those advantages would include (a) better targeting of new money distributed into the economy by CB monetary operations - for facilitating any growth in the money supply as required by population growth (where this occurs) and productivity gains, (b) increased likelihood that the money thus released will be immediately utilised for spending rather than for saving, and (c) greater speed in achieving these desired economic outcomes. 
      In regard to the first proposal (modified OMO model), since it is intended as a monetary policy alternative, and as the volume of money is being changed, there arises the legitimate question of how the overall financial wealth of the private sector might be constrained from changing (since the latter is the essential characteristic of fiscal operations).  Lets construct a simple budgetary scenario in which the central government determines to spend amount A over the forthcoming financial year (FY).  Suppose the projected tax receipts are T, and that Treasury arranges to sell Y securities to the private sector and allocate X securities to the CB at the beginning of the FY, on the basis of their projected estimated needs.  Then according to conventional accounting rules Treasury would be authorised to spend an amount   A - T = Y - X  during the FY over and above that which is authorised by tax receipts alone.  That is, the volume of securities to be allocated by Treasury to the CB (i.e. the magnitude of the dividend) is calculated from

X = Y + T - A

      It can be seen that the net financial result of this combination of operations is effectively identical to conventional OMO, except for the much better distribution of new money introduced into the economy, and in particular the fact that this money would be immediately available for retail transactions rather than being tied up within the financial system.
     One way of proceeding, since the normal condition is a net monetary injection on average, is to operate a hybrid system. Namely, a dividend payment at fixed monthly intervals to cover the expected average value along with fine tuning operations, perhaps on a weekly basis, to cover variations from the average. This has the advantage of not introducing unduly large variations into account balances. 
      In regard to the second alternative proposal (public-debt-free model), this has the attraction of not requiring Treasury to issue public debt instruments to the private sector (or to the CB for that matter).  Public debt requires the regular payment of interest from the public purse.  Moreover conventional OMO entails buying and selling of government securities by the CB, and is saddled with the relative inefficiency of shuffling securities into and out of the CB's assets portfolio.

JH


On 26/05/2013 5:40 PM, Krzysztof Lewandowski wrote:

Hi John,

Could I please get more info about your proposed scheme? As you probably know there are now two Guaranteed Basic Income initiatives officially running in EU and Swiss and I also promote it in my writings in Poland. Your endogenous money grow model would be suitable for similar projects.

Best regards

Kristof Levandovski

Wiadomość napisana w dniu 2013-05-24, o godz. 07:04, przez John Hermann:

Deficit spending is inevitable (as a long-term average) for the simple reason that it provides the only basis, within the current monetary framework, for maintaining growth in the supply of state fiat money.  Without this growth the demands of the private sector for credit money (currently produced by banks) and currency could not possibly be met, and deflation would set in.  It is significant that the secular trend (available from federal government budget statistics during the past 100 years) is for deficits to be the norm and for surpluses to be the exception.  In the U.S. for example, 85% of annual federal budgets are in deficit.  Moreover it is no coincidence that the magnitude of the annual deficit happens to be very close to the annual rate of growth in productivity, measured as GDP.  I would submit that there is a causal relationship between the two. 

In regard to John's insistence that central government deficits can be financed without incurring debt, I agree that this is true in principle.  However I would also point out that the public debt of a sovereign government is not really debt at all, because it never needs to be paid back.  That is, a sovereign government (by which I mean one which creates and issues its own currency) can roll over its public debt in perpetuity.  Moreover such public debt is mostly generated in response to any contraction in private sector debt (increase in private sector savings) -- that is, it is structural rather than discretionary.  And the reverse is true - when private sector debt increases, public sector debt is reduced.  Such is the dynamics of a debt-driven economy.  The debt that is responsible for doing serious damage to the economy is not the central government's public debt, but rather it is private sector debt - a conjunction of household debt, corporate debt, and foreign debt - one or more of which which will grow inordinately when there exist asset bubbles.  These bubbles inevitably burst at some stage, leading to significant economic contraction and social dislocation.

And in regard to John's point about a national dividend, I have recently proposed a scheme in which what I prefer to describe as an ongoing national dividend may be created and distributed to the entire population by a modification of the mechanism for implementing monetary policy.  The virtue of this scheme is that it allows money to grow in an endogenous manner.  In an endogenous system, the amount of money created is determined by the demand of the private sector for credit and currency.  Most monetary reformers seem to think that the only alternative to the present system is an exogenous banking system. Nothing could be further from the truth. With the exception of the Chicago Plan, almost all proposed full reserve systems envision exogenous money growth directly controlled by the government. I don't think an exogenous system is workable in the long run because it is too easily politicized and corrupted.

John Hermann

On 24/05/2013 12:13 AM, helge nome wrote:

The problem with most economic thinkers and their thoughts is that they grossly oversimplify the nature of the elephant they are dealing with.  Douglas was no exception.   Helge

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From: johng...@hotmail.com

There is a considerable number of economists who have now come round to the need for government deficit spending, i.e. that there is a shortage of purchasing power in the economy.  They are appalled at what austerity is doing in Europe and the USA.  The next step is to get them to realise that it can be done without incurring debt. Some now think that debt doesn't matter because sovereign nations owe it to their own central banks. They are mainly of the MMT school.  Economic Reform Australia (ERA) is a melting pot for this.  Possibly the first some of them heard of Douglas was when I had an item published in their newsletter suggesting it was a disaster that his analysis had been overlooked for so long.  ERA is now considering seriously the principle of a National Dividend.  Results are got, not by sniping from the side, but by joining in and using a reasoned approach. It does work with people who are secure in their own ideas.    Regards.  J R

---

From: jimsch...@gmail.com

Right on Steve, keep on bugging him.  I think that many economists owe a great deal to Douglas but fail to acknowledge him

On Sun, May 19, 2013 at 11:25 PM, Steve Hummel BenFranklinWasRight <ataus...@yahoo.com> wrote:

Here is his latest column for the Australian Business Spectator. He
talks about the conflicting theories of price (neo-classical/supply
and demand, versus cost plus) and mentions that a recent discovery
from his monetary software called Minsky is responsible for a change
in his thinking.

I have been a pain in the @ss posting about Social Credit philosophy
and mechanisms on his blog for well over a year. I'd like to think
perhaps some of it has sunk in. Maybe its just wishful thinking, but
who knows. He is the most vocal and stark economic iconoclast out
there currently. Here is an excerpt from the article:

"The reason that reality refuses to follow theory is that most goods
are produced in factories which engineers designed to work at maximum
efficiency when they are close to full capacity. So rather than

efficiency falling as output rises, it tends instead to rise: it’s

cheaper to produce each unit of output in a busy factory than in a
relatively idle one.

This empirical fact hasn’t interfered with economic theory at all – as

any current or past victim of an economics degree can attest. But it
does seem to decide the case in favour of the classicals for the real
world: prices must be set by a mark-up on costs, rather than by the

‘twin blades’ supply and demand.

That’s the opinion I held, until a crucial step in generalising my
model of Minsky’s Financial Instability Hypothesis implied that, at a
macro level, the two models are identical. I’ll get on to that – and
the role of prices in economic instability – in the next post in this
series."

http://www.businessspectator.com.au/article/2013/5/20/economy/seductive-super-models-supply-and-demand#comment-300661

[Steve Hummel BenFranklinWasRight]

https://www.youtube.com/watch?v=5OLn2sG5Tj0&feature=youtu.be

To Steve Keen poster on YouTube:  A modern debt jubilee is an
excellent idea, but a very poor place to stop & to abort an even more
transformational  thing which is a policy of a universal individual
monthly dividend. That dividend would change the entire character of
consumer finance, result in far less currently necessary borrowing by
both the government and individuals, make the entire economic system
simultaneously more robust with permanent demand by solving the then
unemployment "problem", downsize the TBTF Banks' powers of extortion
over the government and the rest of us and create an economic
psychology that would enable Faith as in Confidence, Hope, Love and
Grace...instead of inhibiting these...as the current system does.

And that's all that a universal dividend....would do.  :)

On Jun 2, 9:50 pm, John Hermann <herm...@picknowl.com.au> wrote:
> Apologies for the delay in forwarding this promised item -- attributable

> to major problems with my computer, which hopefully are now resolved.    JH*
>
> Monetary Policy A**lternatives and a National Dividend*
> *John Hermann*
>
> *Introduction*

> *
> Definitions*

>        Monetary policy entails changing the volume of money accessible
> to the private sector without necessarily changing the overall financial
> wealth of the private sector, and provides for their currency and credit
> money requirements.  In an endogenous money system, such changes are
> implemented via the mechanism of keeping the rate of inflation within
> prescribed bounds.
>        Fiscal policy entails changing the overall wealth of the private
> sector without directly changing the volume of accessible money, in
> order to keep aggregate demand within acceptable bounds.
>        Liquid assets are a subset of private sector wealth - the
> conjunction of money accessible to the private sector and assets of the
> latter which may be easily and speedily converted into accessible money.

> *
> The Alternative Proposals*

> *Proposal 1:   Fiscal deficit model
> *

> *
> Proposal 2:  A public-debt-free alternative*
> *
> *A more radical approach than the above to implementing monetary policy

> - by the manipulation of interest rates - is for the central government
> to abandon issuing debt securities altogether. Thus Treasury would
> simply cease issuing bonds and other securities to the private sector.
> And of course a mechanism would need to be developed for suitably
> phasing out the current system and phasing in the new system, in order
> to avoid financial chaos and ensure that existing bond holders are not
> financially disadvantaged.  It is not my intention to discuss this
> important issue here.
>

> *(a) Fiscal balance model
> *

> In the first alternative model for this approach, it is required that
> central government spending will be exactly matched by receipts obtained
> from taxes and other sources of income (i.e. other than from public
> borrowings, which would not be permitted).  The CB would manipulate
> interest rates, to ensure that they fall within a prescribed range, by
> the mechanism of direct but variable payments of newly created money
> into the bank accounts of citizens.  These dividend payments would

> necessarily increase ...
>
> read more »