|Subject:||RE: [socialcredit] Rent for everyone|
|Date:||Saturday, March 25, 2006 00:00:41 (-0800)|
|From:||thomsonhiyu <thomsonhiyu @....ca>
|In reply to:||Message 3717 (written by Jeffery Smith)|
(Jeff:-) Who gets debited?
(Joe replies;-) The Nation's 'Capital Account'.
(Jeff asks:-) The same people as who were credited?
(Joe replies:-) No. The 'Nation' and the 'individuals' (the citizens
within it, 'individually'), can be envisioned as always being on
opposite sides of the ledger. Much the same as the 'Assets' of a
'Company, (analogous to the "nation"), are on the opposite side of its
Balance Sheet from any 'Liabilities' PLUS the 'Shareholder's (analogous
to the "citizen's") Equity', or 'Capital'. His 'ownership' in it, or as
you have noted elsewhere in comparing 'owe' and 'own', what his Nation
'owes' him. As the National Capital Account grows, as it generally will
if the 'wealth' of the Nation is actually increasing, and, in most cases
it is, 'dividends' can be distributed from it to allow him to share in
what's been created. Either directly, as payouts to each
'citizen/shareholder' in money, and/or indirectly, through lowering by
means of 'compensated' prices what we pay for all those 'consumables'
we all need and/or desire.
(Joe;-) 'capital appreciation' taken over the same time period is much
greater than overall 'capital depreciation'.
(Jeff;-) Techno-progress outpaces the wearing out of individual items of
capital. Sure. But maybe there's a more transparent, less metaphorical
way to say it.
(Joe replies:-) The Social Credit economic proposals deal with a
correctable 'flaw' in the conventions of 'double-entry cost accountancy'
that currently exists when applied 'macro-economically' as it relates
to the flows of 'money' (credit) in the overall economy. So 'capital
appreciation' and 'capital depreciation, being 'accounting' terms aren't
(Joe:-) It ISN'T just 'locational value'. That's only a part,
(Jeff:-) Conceptually. Not economically. Watch what happens. First,
techno-progress. Second, higher site values. See?
(Joe replies:-) You're making the assumption that the 'figures' actually
reflect the 'facts'. But do they? Completely and correctly? I don't
think so. We've seen a very large increase in 'site-values' here in
most of British Columbia in the last few years. Both of those 1/2 acre
lots I told you I own have gone up from $ 52,000 to $ 75,000 in
'assessed' value in the last year alone. On paper I am supposedly $
23,000 a lot 'richer' than I was a year ago. But if I sold the lots,
which I'd have to do to realize my 'riches', what would I have to pay
for another 1/2 acre lot like the ones I'd just sold? If it was $
75,000, which it most probably would be, how am I in anyways 'richer'?
We're just dealing with 'bigger figures', in what might be called pure
price 'inflation'. Not an increase in 'purchasing power', which I
believe is called 'prosperity'. And this is a major, though yet largely
undiscussed, (or possibly 'suppressed'), problem we're facing here.
Everyone is supposedly 'richer' by the rise in their equity in
'site-values', but it is an 'artificial' richness. If I were to borrow
money on the security of my increased equity, what could I do that's
'real', in terms of 'production', that would increase my income enough
to pay it back? I can tell you from my perspective, which I believe is
an ever increasing perspective of most people, in businesses large and
small who are still trying to do something 'real' here, absolutely
(Joe;-) A glut of goods often brings prices down, true. But it does so
at the expense of the producer.
(Jeff;-) Maybe, maybe not. Depends on what else is happening. His other
costs could be falling, too, It could bring him more business tomorrow.
(Joe replies:-)Could be. But he has to recover costs that've already
been incurred. Including 'capital costs' that have already been
incurred. That money's been spent. These 'costs' cannot be reduced, if
his books are to reflect 'reality'. If they are not, he's deluding
himself (or others) he's still 'profitable', when he's actually anything
but. "Living off your depreciation", I believe the practice is called.
It would probably amaze everyone how widespread that practice has
(Joe:-) > And most of his plant's property value, including quite often
'value' of the land it sits on, vanishes.
(Jeff:-) Then the land would be free, which it is not.
(Joe replies;-) Speaking of it just as 'land' alone, the Douglas
proposals recognize it is not 'free' because someone has already paid
something in money for it. And they are entitled to receive back on
sale, again considering it just as 'land' alone, what they have
previously paid for it in money. They didn't 'create' the land itself,
it was here, and it was originally 'free'. Only in the improvements
they've made to it was there a 'real' cost. The Douglas land proposals
are often difficult even for Social Crediters to understand and agree
with, because they must be taken in conjunction with the other changes
he proposed to be meaningful in the way intended.