| Subject: | Re: [socialcredit] A and B | | Date: | Wednesday, December 14, 2005 07:42:35 (-0800) | | From: | William B. Ryan <w_b_ryan @.....com>
|
| In reply to: | Message 3206 (written by Triumphofthepast) |
No, Michael. Account balances represent unliquidated
debt in their totality. But account balances in the
creditary system are utilized to conduct transactions
and therefore have a direct functional relationship to
economic activity. Balances accumulate in both the
sector of firms and the sector of consumers, but only
the reflux from consumers over the retail counter will
liquidate debt being impressed to the retail counter,
which is directly proportional to the flow of A+B. B
represents the flow in payments by firms to firms as
they pass along costs to final consumers.
So long as A remains proportional to B, the reflux
from A will liquidate or cancel A+B in double entry
accounting. If the ratio of B is increasing to A it
cannot as a simple matter of mathematics. I am
stating this as a fact and not expecting you to
understand it.*
There is no mechanism in double entry accounting to
cancel the differential if B is increasing to A. I am
also stating this as a fact inasmuch as you know
nothing of double entry accounting or its underlying
theory or rationale except perhaps the superficial
elements thereof you may have learned in school.
That is to say, it is mathematically impossible for
the reflux from A to cancel or liquidate A+B in the
absence of consciously applied accounting adjustment,
say from something like a National Capital Account,
for example.
Erratic and inadequate compensatory adjustment not in
reflux to A is from "favorable" balance in foreign
trade, or bankruptcy. Another possibility is
government deficit spending. But these alternatives
do not represent consumer preference in respect of
closing the financial circuit.
Take that as a fact too, or reject it. I don't care.
You might as well leave Douglas's theory to the Dodo
birds.
-
* You ridiculed my effort to "extrapolate" the concept
for you. My offer to do so is no longer on the table.
--- Triumphofthepast@aol.com wrote:
"From the manufacturers' fund, continuing payments are
being made to . . . firms, which are B receipts to the
[manufacturing] sector. A + B payments = A + B
receipts + credit." (Bill)
Bill makes it sound as if part of the price is
liquidated by the manufacturing sector in the form of
B-payments to itself ("B receipts"), and consumers
have to pay only the other part. But that is not the
case. A B-payment "liquidates" the cost at one stage
in production only by passing it on to the next, and
the WHOLE has to liquidated by the final consumer.
Which is as it should be if we are to have a
consumer-driven economy.
Michael
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