| Subject: | [socialcredit] Re: Extrapolating A+B Part 1 | | Date: | Monday, September 19, 2005 09:11:13 (-0700) | | From: | William B. Ryan <w_b_ryan @.....com>
|
"But the interest paid by the banks is much less than
that exacted on loans..."
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It is less but there are also ordinary business
disbursements from banks for salaries, utilities, etc.
plus dividends to stockholders. Net interest received
is merely the gross profit from which expenses are
deducted.
-
"...and you have not accounted for the fact that
lending is the only source of new money to pay
yesterday's interest."
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It is also the "only source of new money" to pay
yesterday's phone bill, yesterday's utility bill, and
yesterday's wage bill.
The flux and reflux of loan principal is something
different than transfer payments from one party to
another in ordinary transactions; they are
conceptually in different categories.
The banker as businessman is in the second category
when he receives interest or makes payments from his
income; he keeps his books like any other businessman
and must cover his checks while operating his business
with the intention of making a profit, like any other
businessman.
The socialist is dead wrong but less wrong than the
tunnel-visioned monetary reformer; he sees the problem
in profit, the "evil" to be eradicated.
M -> C -> M + P; his version of the paradox is posed
thusly: If the capitalist spends M with the intention
of getting back M + P, from where does P arise?
His more generally stated but only slightly less
simplistic solution: Abolish profit.
The socialist expresses his utter contempt for the
monetary reformer who says abolish interest only, for
the socialist more correctly recognizes, if only
slightly, that interest is merely a subcategory of
profit.
In either case, the "solution" is the spanner in the
works of the market economy.
And with the spanner goes the hope for economic
democracy.
-
--- Marc Gauvin <gauvin@wanadoo.es> wrote:
William,
But the interest paid by the banks is much less than
that exacted on loans and you have not accounted for
the fact that lending is the only source of new money
to pay yesterday's interest.
Best,
Marc
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