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Hi Joe:

I'll post some comments and respond in turn in red.

(Joe) A 'debt' is still a 'debt', whether it has interest appended to it or not. It is a 'call' by the lender upon the borrower for that borrower to 'do' something, and as such is an external means of control over one individual by another.

(Jim) But a bank loan isn't just a debt, it's also a credit. Let's look at a mortgage. When you buy a house, the bank loans you $100,000, say, and the house become collateral for that loan. The "loan", or the money loaned, is owned by you and the bank. When I buy the house the money is 'owned' by the seller. This is true, and perhaps I should of clarified a little further. Let's start again. I want to buy a brand new house. I go to the bank for a loan. I offer the house as collateral, the bank looks at my employment history, and ability to pay, and determines I should get the loan. They create at that moment a debt (or a credit to them, but I'm looking at it from my point of view so actually a debit to me), and a credit (the money they deposit in my account). At this moment, both the bank and I "own" that money. I'm afraid I don't follow you here, Jim. How do you mean ''both the bank and I "own' that money''? When the 'money' is credited to your account who has control over this money? You, or the bank? Who writes out the cheque that purchases the house? You, or the bank? Whose name will be on the title deed to that house signifying 'ownership', albeit subject to any liens against the title, of which the bank's mortgage may be only one, or 'the' only one? The bank's, or your's? The bank certainly has no 'ownership' of your house and the property on which it sits as long as the contractual agreement between you and it is fulfilled. Even in the event of default, that doesn't happen until there's a foreclosure initiated by the bank. I then write a cheque to the builders of the house, and I have the house, with a debt, and the builders of the house have a credit with costs to clear. Okay, but the fact you borrowed money from the bank doesn't make the 'house' the bank's property, does it? The builder didn't sell the house to the bank, even though it's their creation of credit that's paying for its transfer from him to you. And is subsequently allowing him to liquidate his costs of construction which a bank's loan to him may have enabled him to incur. He sold it to you. And as long as the mortgage agreement is fulfilled on your part, that house is yours. So I don't really see what the signifigance is when you say what you said above about 'at that moment you and the bank ''own'' that money'. The bank is providing you the means to purchase 'your' house. It's done the assessment of your 'credibility', your ability to pay for your purchase over time. You have, when possession to the house is taken, the immediate use of an asset that you'll pay for over the next, say, twenty years. The alternative would be for you to rent, or camp out, or live in a homeless shelter, or with your parents, etc., for that long while you saved up enough money to dispense with the bank's services. In any case there is the difference between the immediate 'use' value of a house to you, versus the option of waiting twenty years to be able to 'use' one. Surely this has some value to you, or you wouldn't have taken out the loan? Less any amount of it he may still owe on the house. I 'own' the house, my name is on the title. And the bank 'owns' my loan. Secured by a charge on that title. If I don't repay as I've contracted to do, the bank will 'own' my house. And my 'equity' in it, such as may initially be required as a 'down payment' nowadays, plus any payments on the principle I've made in the interim, will be lost. Again, this is absolutely true. Like I stated, you own the house up until such a time as you can't make your loan repayments. Well, what would you change here? There may be many reasons 'why' these payments can't be made. And there most certainly may be good grounds, in certain instances, for the bank to forego them. There may also be many reasons 'why' mortgage terms in general should be altered, and the interest rate on them regulated. But you would have a very difficult time indeed trying to set up 'interest-free' mortgages and other loans and maintain a viable money system. However; usury ensures there is always more debt than credit, so the fact is that it's guaranteed a certain percentage of the population will lose their assets because there's not enough money to pay back the banks - unless, the economy continously grows bringing more goods, and loans, into the system.You could say the same thing about 'profit', Jim. It's always a 'plus' quantity, above and beyond what was distributed in costs. Yet it 'comes' from somewhere, and it 'goes' somewhere, too. Neither the 'usury', nor the 'profit' are sums of money which 'disappear' through cancellation as bank loans are paid back. These sums, in so far as they are spent back into the economy, add to the pool of money available to purchase the 'consumer' goods for which the lending of bank created credit to increase production made possible. There is only a 'problem' when these sums are not distributed bank creates it as as debit (debt, or iou), and a credit (deposit). The actual house is owned by you, and can only become the property of the bank if you fail to meet your loan repayment schedule. Now the new money has value because it's attached to some asset - the house. But as the house depreciates over the course of it's existence, then the money for the loan should be paid back over the "life" of the house, so that the money in existence has something tangible to back it up. And how is this to be determined? How does anyone know what the actual 'life expectancy' of any house is going to be? The factors involved in making such a determination would be impossible to quantify accurately. Absolutely, but it's the best we got. Accoountants do this all the time when they depreciate buildings or equipment. I agree that more work needs to be done in this area to more closely match real depreciation with what accountants depreciate. But I can guarantee you this, it will never be perfect. A 'house', as I understand it in regards to Social Credit principles, is a 'consumer' good. We have perfectly good houses in our area that are well over 100 years old. And there is no doubt whatsoever that some houses being built 'properly' today might well last just as long. Or possibly longer. But I do not see how, in a practical manner, an 'interest-free' home mortgage could be paid off over the life of such a house. We simply do not know, for sure, which houses will 'last', and which ones will not. So we limit these new mortgages to some 'average' term, say twenty or twenty-five years maximum. Like now. Now at the end of this term the house still exists, and maybe it's 'worth' more than what it was when it was constructed. But the 'money' that represented its original value has all been 'recalled' by the bank by this time, and cancelled out of existence. And there's been no increase in 'pre-existing' money, since none of the original mortgage payments went to 'usury', and remained in the system to help meet the cost of this rise in value. It's all been cancelled. So we have an asset in existence that hasn't depreciated to any extent, increased in value even, maybe, and no money that represents it. And we have an imbalance, WITHOUT INTEREST ENTERING INTO THE EQUATION AT ALL. . This would be a logistical nightmare to try to determine for each individual dwelling. Which would need an 'individualized' repayment schedule, in some cases stretching out over 100 years. Who's going to be around that long to keep up the payments?The bank would own the house at that point. In other cases, with the way some homes are being built here nowadays, the life expectancy might be shorter than what mortgages are usually taken out for. Shorten the mortgage.On those houses, Jim, the borrower s more often than not COULDN'T make the payments, even if they were completely 'interest-free' payments, if the term were shortened. ( They could never truly be 'interest-free', since the COSTS of providing mortgage loans must be paid by someone, in someway. And these costs are ongoing, over the term of the mortgage) It often would be in my view anyway. How could any bank ever keep on top of all that? And then there's the change in 'property values' themselves to consider.

When the house ceases to exist, so should the loan. So the home'owner' will never be out of debt? And the home owner's payments would be much less. Although, I doubt there's a house that lasts 100 years anymore without major renovation. Theoretically, with all we know now that we didn't know 100 years ago, it should be possible to construct a house that would last that long without any great amount of 'renovating' necessary. Why we do not do this can be put down to many reasons, but one of the major ones has to do with the workings of the current financial system. There will be no incentive for him to pay off his house, to save interest charges, so he'll just let the debt ride? Remember what I'm saying here. There should be no interest charged, or if there is, a dividend equal to that amount should be given to everyone. Either way, it's not a factor. This is a corruption of the true basis for the National Dividend, Jim. The 'dividend' is not to be 'taken', as interest, tax, or in any other way from anyone. And 're-distributed' to someone else. It is a creation of 'new credit', introduced into the system by direct payment to consumers to allow them to fully benefit from the increment of asociation and the cultural heritage each of us has a stake in and a right to. Many, no doubt, would like that nowadays. But how, in any practical sense, could this ever be accomplished? I can see the 'administration' costs, just keeping track of the 'life expectancy' of every house, and at what rate the 'loan' against it should be amortized so that both 'disappear' together, being absolutely horrendous. Who pays for that? And how? You're paying for that cost right now. And we would still be paying, probably more, albeit perhaps in a different way, under this other scheme., However; more loans can be made to "spruce up" the house to extend it's life span. However; as I've always stated, the loan itself, or who owes who, is a question of ownership, and not a question of balance. I agree that banks can exert alot of control via their power to create money at will. As I've already stated, a 'debt' is still a 'debt'. Under such a scheme as you've described above, it is a furtherance of 'external' control over the individual by an organization. Something I believe is incompatible with 'true' Social Credit. I agree. Something that should be the exclusive control of the government acting on behalf of the citizens within that community. How do you know the 'government' is going to act that way, Jim? Just because a 'debt' is owed to the 'government' instead of a 'bank' doesn't make it any less a 'debt', does it? Social Credit, at least as far as I understand it, seeks to 'de-centralize' the powers of 'government' and 'banks'. Not combine them, and make them absolute. If you decentralize the government, then you've decentralized the ability to create credit. Whose possession is this 'credit'? The bank's, the government's, or your's as a member of your community freely associating with other members of that community? But I'd rather have that ability in control of the government, who I can elect, than in control of banks, where I have absolutely no say. As long as we hear any politician, of any political party whatsoever, utter those unfailing words they ALL utter in answer to their constituency's desires, "We can't do (whatever it is) because we don't have any money!", it isn't going to matter who we elect. It's a clear admission that FINANCE CONTROLS POLICY, and the politician answers to a higher earthly authority than those who elected him.

This reminds me again of the type of deductive reasoning expressed in 'Zeno's problem'. You may not have seen it, Jim, so I'll reproduce it here. Maybe you can see the similarities.

A classic example is the problem of Achilles and the tortoise.
In its classical form, with the classical pre-suppositions, the problem is insoluble.
As stated by William James, the problem, or paradox as it is usually known, runs:
"Give that reptile ever so small an advance and the swift runner Achilles can never overtake him, much less get ahead of him; for of space and time are infinitely divisible (as our intellects tell us they must be), by the time Achilles reaches the tortoise's starting point, the tortoise has already got ahead of that starting point, and so on ad infinitum, the interval between the pursuer and the pursued growing endlessly minuter, but never becoming wholly obliterated,"
The modern mind can "see through" the problem at once because we are the possessors of new points of view to encompass such paradoxes; the problem has in fact vanished, and we concern ourselves with the more practical problem:
"Given that the tortoise and Archilles have such and such speeds, and start with such and such a distance between them, how long will it take Achilles to overtake the tortoise?"

Actually I'll respond as I did to Bill. It's a non-sequitur in regards to what I'm saying. I'm saying that because of usury, the debt is achilles, and the credit is the tortoise. Because of interest, the only way to pay back loans is by access to more loans, but those other loans also have interest, and it is because of this that the rate of growth of the debt is greater than the rate of growth of the money supply. Douglas himself saw this, although perhaps he did not see the logical conclusion when he states, " The debt differs in nature from the debt created by private finance in exactly the same way that a debt to foreigners differs from an internal debt-its repayment actually takes money out of the country. If a rise of prices has occurred, it is repaid twice over, once in increased prices and again on redemption. Secondly, there is no provision in this method of financing for the money required to pay the interest on the debentures, which, in fact, can only be paid, if it is paid, by the issue of fresh money to pay it, which, under existing circumstances, comes from the same source, that is to say, the financial system." The facts speak for themselves Joe, because of usury, the debt is 2.5 times the money supply, and as time goes on, this figure will get worse because debt is growing faster than credit, and this is a result of usury.But this is so even if there were no 'usury'. As soon as a loan of bank-created credit is called back, and 'cancelled' by the bank; or 'sold' to the public in an exchange for 'pre-existing money' for securities of some type; PREMATURELY, while there are still COSTS that same sum of money originally created still outstanding on anyone's books, those COSTS can't be met. Joe, go back to my example about the butcher and the baker that Douglas used. If a credit is cancelled pre-maturely, without covering certain costs, then another loan is needed. With this I agree, but this does not increase the aggregate debt. A dollar of debt was cancelled, and a dollar created. So what? The debt hasn't increased. Without usury, I can choose to increase the debt if I want more consumption, or decrease the debt if I want more leisure. However; with usury I am FORCED to increase the debt to pay interest on a loan which only created enough money to pay back the principle, so my options are economic growth, or financial collapse. I cannot choose more leisure, because that would collapse the financial system. You can take 'usury', 'interest' and 'profit' completely out of the equation, and the REAL problem will still be with us. The 'accounting', as it's done at present, doesn't reflect the reality of a dynamic economy. Without a further debt being incurred, or 'money' supposedly being 'imported' from another credit area through 'exports' or 'foreign investment', or a write-off of these costs somehow, as in a bankruptcy. All things which add to the overall problem. 'Usury', detest it though we may, has no direct bearing on this problem. It would exist even if there were 'interest-free money'. And it will get worse as incomes through wages are increasingly displaced by technology. And those incomes, as a percentage of overall costs, are diminishing and less and less able to amortize overall debt. But wages are not the only incomes we have, and this has been my contention with Douglas' A+B theorem. True enough, but for MOST people they are still the main source of personal income. Someone gets income from profit and someone gets income from "book costs". Someone MAY get income from ''book costs". And someone gets income from 'interest'. If it's distributed to them. All these incomes still go to clear the market. If, and when, they are distributeed Interest might make this debt grow faster when the principle isn't being paid, but it isn't the CAUSE of the problem. And 'eliminating' it, won't cure it. Interest is the CAUSE of B in A+B, but that is not the only problem. You've identified many that do not relate to A+B. Douglas spoke on many issues. And actually I agree with them all, even A+B if you consider that B is usury. If Douglas believed the problem was 'usury' he would have definitely said so. He did not. Instead he wrote a number of things in relation to explaining the 'real' problem, that, when taken out of context, sometimes look like he is attacking 'interest'. I have been fooled this way myself. When you read enough of his writings, in the context in which they were written, you will see he's not focussing on 'interest' for good reason. Not because he was 'confused', nor that interest was the sole factor making up "B" payments, but that it has very little bearing on the whole issue whatsoever. If you look at what I'm really arguing, it's a minutia in the details of A+B, but I think that by arguing about that minutia, you're assuming that I'm disregarding everything Douglas said, or that I have to believe in everything Douglas said in order to believe in Social Credit. I don't believe that's true. And, personally, I think it's a dangerous mindset, because it's makes Douglas out to be a "demi-god" beyond criticism. Douglas , to the best of my limited knowledge of him, would have been the last person I can think of who would have ever wanted to be thought of as a 'demi-god'. He was an 'engineer', obviously proud of his profession, and by all accounts very competent in it. What is the greatest asset anyone engaged in a profession such as 'engineering' can possess? Is it not 'reputation'? His was, and is, a very concise profession. And anyone wanting to be successfully engaged in it is very likely to take particular pains to make sure their 'reputation' is beyond reproach, wherever it is humanly possible. An engineering mistake in designing a project like a bridge, or hydro-electric plant, could be as disastrous to the project as to the future prospects of that engineer. It is not that mistakes do not sometimes happen, we all know they do. And often many highly useful things are learned from them. The first of which, sometimes unfortunately, is GET ANOTHER ENGINEER. I am of the opinion that Douglas, who approached the subject of 'economics' from the perspective of an engineer, would NEVER be so careless in his treatment of that subject to do anything that would compromise his 'reputation'. This is 'why', I believe he "guardeed his faith with a peculiar jealousy", as one critic wrote. Not that he fancied himself as a 'demi-god' of economics, but because he did not want his name, and reputation, attached to any corrupted versions of something he, himself, did not propose. And, in all likelihood, something that had varied from his own proposals to the degree it wouldn't work. We should seek to understand 'why' he identified the problem he did, instead of the easier target of 'interest'. I am certain that he's already covered the ground we're going over. But with the thoroughness of an engineer, willing to put his reputation on the line. I understand what has happened to Social Credit in the course of it's existence, and also understand why Social Crediters are leery of ideas different from Douglas being deemed "Social Credit". But you have to be able to seperate the wheat from the chaff. I will give you a line by someone who wrote me a private email, but since it was private, I won't give his/her name. He/she said, "There has been a huge debate on the role of interest with, unfortunately, a prevailing consensus by the hard-line ideologues on this list that interest is only a minor contributor to the tendency for debt to grow faster than money. I have been particularly ridiculed and lampooned by Bill Ryan for having the impertinence to display such views over his list. It is indeed very sad to see people with closed minds seeking to censor other points of view in this way. I think your analysis helps to redress the balance, and to establish interest (and particularly usury, although they seem to regard "usury" as a dirty and ideologically inspired word) as a factor which greatly exacerbates this tendency, whatever might be the fundamental causes. And I also recognize and respect your view that it is THE fundamental cause, even though I personally feel that there are other contributing causes."

That is why I'm not interested in "debating" Bill Ryan, and personally don't care if the Social Crediters in the forum, or anywhere else, are interested in actual debate. I think there's far more we agree on than disagree Joe, but I think we should have a vehicle for expressing our disagreements and learning from each other. I always enjoy talking to you, and I learn a great deal in the process. We both have different backgrounds and have a lot to share.

We might say that 'interest' and 'profit' are synonomous. They are necessary in our present system as 'inducements' to produce. But which came first, the chicken or the egg?Without the chicken there'd be no egg, and without the egg no chicken. It's a dynamic process, who know's when it began, or where it will end? We simply know we have chickens, and they lay eggs, and we get to use both. The only real profit that a company earns, because as I've stated before, from an economic point of view, if you own the company and administer it, then the administration charge needs to be taken out of the profit as a wage to yourself (even if it's unwise to actually do so for tax purposes), is a return on capital - and the opportunity cost of capital is INTEREST. If it weren't for interest, there would be no drive for more and more profit. This is an interesting point. In some businesses today, and certainly in many businesses in the past, there would have been no distinction between the owner's 'wages' and 'profit'. They are, or were, one and the same. Today, I am paid a salary by my company for my 'administration' and other services to that company. That salary is a 'cost', same as any other labour cost. If it wasn't being paid to me, it would be paid to someone else, and if they were more successful at 'administrating' than I am, maybe I could get more time to study Social Credit! The administration charge isn't taken out of 'profit', for there can be no determination of 'profit' or 'loss' until ALL the costs are accounted for against the income received from the price of our products. Whether there's 'profit' or not, I still have to eat, so I require a salary. It may be adjusted, and usually is, to take maximum tax advantages wherever they are most beneficial at the time. Whether that salary is paid out of current earnings, or previous ones that have been retained, it is still paid. When it cannot be paid, I either find a new source of funds, or go on a forced diet! If we did away with either, in our 'imperfect', actual world, the alternative to them would be stark 'compulsion'. The triumph of the power of 'fear' over the power of 'love'. Neither interest nor profit should be particular problems when Social Credit is properly applied. And if either were, they could be easily dealt with. You're right, properly applied Social Credit eliminates the problems of usury as I see it, so in essence, we agree with the solution. 'Usury' is simply another 'B' cost. It isn't the ONLY 'B' cost, though. As such, any deficiency caused by it can be corrected by making it a 'distributed' cost and through the National Dividend and/or Compensated Price. It is in the pre-mature return and cancellation of 'bank-created' credit while the 'costs' it created haven't been fully liquidated that the larger problem lies. I disagree. This does not create "more" debt, it leaves the aggregate debt untouched, because it just forces someone else into debt by the same amount. Interest is what grows the debt faster than the money supply.The debt will be found to grow even without 'interest', Jim. Take it and 'profit' out of the equation altogether. Sell everything 'at cost', and in our modern productive system, under the current method of accounting, the 'debt' (generation of costs) will still be at a faster rate than the 'money supply' (generation of incomes).

Since it's Bill Ryan's 'accounting proof' you take such exception to, would it not be better to at least allow him a chance to respond, too?

Two points Joe. 1) It's actually not Bill Ryan's proof, it's a "proof" offered up by the banks, and I've seen it long before I met Bill Ryan. 2) I've had this debate with Bill before, but instead of debating me, he resorted to ad hominem attacks, and I have no interest to engage in any discussion about anything with Bill Ryan.

You, on the other hand, I like and respect very much. And will debate anything with you, or any of the others on this list.Thanks, Jim. It's too bad that we all can't talk to one another in a civilized and respectful way, and not have to engage in juvenile name calling when there isn't agreement. My hide is thick, maybe my skull is too, so it doesn't really bother me too much if someone calls me names. It doesn't bother me either Joe, but I don't have time to engage in that sort of thing. I work, as do you, and have things to do. So when I do find time to engage in debate, I seek actual debate, and sharing of ideas, not personal attacks. (I get far worse every time the price of lumber goes up a few cents!). You know the old saying, "To err is human, to forgive divine." Even Richard Nixon, who should know, said words to the effect that ''Hate always hurts the hater more than the hated". Well, you'll all do as you please, but real progress would be far better served by open discussion in my view. It would be, but unfortunately, that won't happen. Oh, don't be so pessimistic!

Take care,

Jim

Best wishes,

Joe

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