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But surely, if Government is to spend none of the new money to be issued into circulation, it will be faced for ever with the choice of taxation and/or borrowing for its expenditure? And policicians in need of popularity will borrow rather than tax, and government debts will continue to rise? Sounds as if the BC administration was going right along Douglas' lines in this particular, if not in others! "Let them borrow, but give the (people) the money to pay the interest."?

And how does this gel with the atitude of some Social Crediters that most or all taxation is unnecessary?

Seems to me like wanting to have the cake and eat it too.

Regards. John R.

From: "Wallace M. Klinck" <wmklinck@shaw.ca>
Reply-To: socialcredit@elistas.com
To: socialcredit@elistas.com
Subject: Re: [socialcredit] the "effect" of interest ~ back to Peter
Date: Fri, 02 Jun 2006 03:06:07 -0600

Thanks for the comments, Joe.

There is no such thing in Social Credit thought as a "positive contribution to keeping unemployment down" (see Bill McGunnigle's comments below). Properly understood, our aim is progressively to release mankind from necessary work. We wish to promote conditions which are conducive to an increasingly leisured and civilized society--and the moreso the better. "Full employment" as a social policy is fundamentally NOT a Social Credit objective and until this is clearly comprehended beyond all doubt, one can never get "off the ground" toward becoming a Social Crediter in any meaningful way whatsoever. Absolute economic security IS a Social Credit objective and is to be pursued, in the financial realm, essentially by means of the Social Credit National (Consumer) Dividend and the Compensated Price.

Regarding a "balanced budget": The Douglas analysis explicitly demonstrates the impossibility of a balanced budget under the orthodox financial regime.  Debt can at times be shifted from one jurisdiction or social or governent stratum to another but in order to carry on as a society we must, as a society, go increasingly into debt--unrepayable except by periodic refinancing (i.e., borrowing). Essentially, the "floating" debts of society are converted into expanding "fixed" debt of senior governments. Under the orthodox, or existing, system of banking and finance, a "balanced budget" (see Douglas in The Alberta Experiment) means:

1. That the economy is static

2. That we consume all of our real (i.e., physical) capital currently, and

3. That the issuer of credit (i.e., the banking system) owns, in final analysis, all real capital

Comment on the above points:

1. We should never be physically limited in economic activity, whether in production or consumption, by artificial financial constraint. Physical potential for production and consumption should always be financially accommodated, i.e., finance should always reflect physical reality.

2. Obviously we do not consume our capital currently inasmuch as it clearly accumulates and lasts into the future. Unfortunately under orthodox financial rules money in respect of real capital charges is withdrawn prematurely via the price mechanism, i.e., long before the physical capital is actually worn out or obsoleted.

3. Productive capital is created by society at large and banking institutions have no right to appropriate effective ownership of it. The Social Credit National (Consumer) Dividend and Compensated Price would confer beneficial ownership of the communal capital upon individual citizens.

Actually, Douglas declared, and effectively demonstrated, that a "balanced budget" is actually a bankers' policy. That should be obvious from a Social Credit standpoint. I agree that the "Social Credit" administration in British Columbia was anything but Social Credit--and you provide an excellent account of the financial policies they actually followed in your Province. It is a confirmation of Douglas's "thesis" that even though British Columbia "enjoyed" a vigorous export trade, the de facto Provincial debt still continued to escalate.

Sincerely

Wally

----- Original Message -----

From: thomsonhiyu

To: socialcredit@elistas.com

Sent: Wednesday, May 31, 2006 2:22 PM

Subject: RE: [socialcredit] the "effect" of interest ~ back to Peter

Hi Bill (McGunnigle),

The original BC Social Credit League Government did, as you say, “run in the black.” The experience of ‘political Party’ ‘Social Credit in BC was substantially different from that in Alberta. While the original ‘League’ government won election after election here for 20 years, I don’t believe they ever achieved over 50% of the ‘popular vote’. There was never an overwhelming majority voting for ‘social credit’, (or some version of it), as there had been in Alberta.

Consequently, Premier WAC Bennett, who was ‘fiscally conservative’, (and a Conservative before joining Social Credit) could run ‘balanced (surplus, actually) budgets’, something which is not consistent with original ‘Social Credit’ doctrine, on the claim that by doing so he was “keeping the Province out of the clutches of the moneylenders.”

What enabled him to do so was the tremendous growth in the BC economy in that era through ever expanding resource exploitation. We had, at that time, markets literally beating a path to our doors. At the same time, his government engaged in what might be called some ‘creative accounting’. They off-loaded some items which had been ‘direct’ Provincial Government debt onto various Crown Corporations and ‘Authorities’, which were ‘guaranteed’ as to payment by the Province, but could then be classed as ‘contingent liabilities’ on the Province’s books. Much in the manner of someone ‘co-signing’ a loan ~ the debt isn’t their’s, it’s the ‘borrower’s ~ unless the borrower defaults. In actual fact, real overall Provincial debt (in total) continued to grow all through the WAC Bennett years.

‘Inflation’, which caught up to and surpassed the seemingly never ending ‘prosperity’ by the early 1970’s, was their eventual undoing. Was a good run while it lasted, but still fell far short of what could have been had some greater attention been paid to ‘real’ Social Credit.

Regards,

Joe

-----Original Message-----
From: W. McGunnigle [mailto:wmcgunn@maxnet.co.nz]
Sent: May 31, 2006 6:26 AM
To: socialcredit@elistas.com
Subject: Re: [socialcredit] the "effect" of interest ~ back to Peter

Hi Joe

         You have forgotten that since then there has been a vast proliferation of government departments and consequently the number of administrators needed to operate them "efficiently". The classic example is the onshore administration for the British Navy. In 1919 when the British Navy had more ships than any two other navies compined well over 400 vessels it managed with an administrative staff of approximately 8000-10000. I believe today when its number of active vessels can be counted on two hands it requires an admin. staff of around 100000. Apparently all Western nations suffer from this disease every civil service increases by approximately 12% per year irrespective on the work load. There are more administrators on most armed forces budgets than service personelle. When we add Social welfare, Judiciary, and political administration costs for parliamentary staff all of whom have proliferated like the proverbial maggots you can see why governments needed all that extra revenue. On the other hand perhaps by employing all these extra staff the government is making a positive contribution to keeping unemployment down. I know that in the UK many offices were decentralised and transferred to areas of high unemployment. A great pity that BC lost its Socred government, From my reading it appears to only BC government that actually ran consistently "in the Black". I know the NZ government hasn't done this consistently for many years.

regards

       Bill McGOriginal Message -----

From: thomsonhiyu

To: socialcredit@elistas.com

Sent: Wednesday, May 31, 2006 4:39 PM

Subject: RE: [socialcredit] the "effect" of interest ~ back to Peter

Hello Bill (McGunnigle),

Thanks for an interesting history and overview of taxation. I didn’t know ‘income tax’ dated back to Pitt. Taxes seem to be demarcated into ‘temporary’ and ‘permanent’ categories here, too. And many ‘temporary’ ones seem to become more or less ‘permanent’ after they’ve been established. Most politicians, once elected, seem to be convinced that they know how to spend your money for you better than you know how to spend it yourself. Especially around election time.

Here in BC, the original Social Credit League Government did remove ‘tolls’ on various major bridges once they were paid for. And generally attempted to keep taxation low for everyone quite successfully. Later governments weren’t so dedicated. And still toll one major arterial highway that was paid off a decade or more ago, along with what’s suspected to be a pretty substantial ‘sinking fund’ to cover maintaining it. The current mob in charge tried to peddle that road and its toll booth off to a private operator for an immediate multi-million dollar cash infusion to the Crown’s coffers, and the opportunity to share in future revenues through taxing the operator’s profits.

The normally passive BC public, in one of the most interesting examples of what can be done when truly non-partisan ‘people-power’ is constructively exercised, revolted. Two Government MLAs whose Ridings the road traversed, one of them the normally ‘impartial’ Speaker of the Legislative Assembly, the other an important Cabinet Minister, got a lesson that wasn’t lost on them in ‘yielding to pressure’. Massed public pressure.

Which completely overrode ‘Party’ affiliations, Cabinet solidarity, ancient British Parliamentary precedents regarding what a Speaker is supposed to say and do, and, eventually very substantial ‘Premier’ pressure from a normally unmoveable dictatorial ideologue.   The Speaker had to speak. Against what his Government was planning to do. The road wasn’t ‘privatized’. But the ‘public pressure’ wasn’t sustained, unfortunately, and too quickly dissipated. And when it did, the Government raised the ‘toll’ !   But, the road is still ‘ours’, and it did illustrate what IS possible, and could be done if the public wants something bad enough and their determination and pressure could be focussed in a way to get it.

Hard to believe sometimes that only 100 years ago many National governments seemed to be funding almost their entire operations, including infrastructure construction costs, mainly through Customs and Excise duties on Imports. And today we embrace ‘Free-trade’, and wallow deeper in debt.

Joe

-----Original Message-----
From: W. McGunnigle [mailto:wmcgunn@maxnet.co.nz]
Sent: May 30, 2006 5:40 AM
To: socialcredit@elistas.com
Subject: Re: [socialcredit] the "effect" of interest ~ back to Peter

Hi Joe

          Noted your comment on tax. Do you demarcate taxes into "Temporary" taxes created to fund a particular publically incurred debt e,g, a war, and "permanent" taxes designed to fund the general revenue for government expenditure? I ask this because there is a particular temporary tax introduced in 1793 to fund William Pitt the Younger's war against France and eventually Napoleon. It was called, surprise, surprise, INCOME TAX. I think that 213 years for a "temporary tax" is a pretty good innings don't you. Or are we looking at the political expediency and duplicity practiced by rulers and politicians since time immemorial? I have the jundiced view that a politician does not have the moral capability of distiguishing between the two type of revenue gathering exercises once he or she gets their paws on the money. Indeed I think they devise ways of accounting to deliberately concealing funding sources so that they can avoid fiscal responsibility for borrowing funds on the international money market.

  Money laundering scams originated at government level to confuse everyone into believing our taxes are being responsibly managed. In New Zealand the scam is called the "Consolidated Fund" all taxation, revenue dues, road fines and overseas borrowing disappears into this great black hole, and no one can determine who is entitled to what because no government funding has been previously earmarked for a particular purpose.The government SAYS that funds are earmarked, but, if you attempt to trace the financial direction taken by any peice of taxation or overseas borrowing, you find it is impossible to tie down.The "Consolidated Fund" pays everything. What a magnificent way to conceal financial fiddling and all perfectly legal. How do you combat this sort of contrived creative accounting?

    Bill McG

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