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Message 4409
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| Subject: | Re: [socialcredit] Douglas: 1923 Ottawa - Part 1 | | Date: | Sunday, December 10, 2006 21:45:24 (-0800) | | From: | William B. Ryan <w_b_ryan @.....com>
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I don't recall seeing a response from Joe on this. So
I'll attempt to briefly respond to Jim's questions
below:
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Hi Joe:
In your response to Peter, you stated:
At various points along the horizontal, or "Time" line
of the "L", draw three more diagonals parallel to the
first. Starting with the first diagonal, label the
first one "Costs", the second one "Incomes", the third
one "Sales", and the final one "Expense".
-
I have a couple of questions relating to this diagram:
1) Why do costs occur prior to incomes being
disbursed?
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[Response] See the diagram appended that's also
archived at
http://www.geocities.com/socredus/compendium
Costs are not prior to incomes. At any point in time
costs and incomes are occurring concurrently. This is
the normal condition of continuous dynamic processes,
in which all the elements of the process are occurring
concurrently.
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2) Why is the cost function and the expense function
parallel to each other?
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[Response] Costs and expense are identical, with
costs being an actual measurable flow, with expense
being the costs curve delayed in time by the
conventions of accounting so that it is matched
against future sales in determining profit or loss.
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3) According to this diagram, income > sales for all
time>0. Do you believe this to be true for all time?
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[Response] The assumption is quasi-steady state
expansion. In steady state expansion income is always
greater than sales because of the delay in the receipt
of income and its expenditure, with the differential
represented by accumulating account balances in the
hands of consumers.
On the other hand, it is possible to think of a
condition of steady state contraction rather than
expansion. In that case, the disbursement from
account balances held by consumers will exceed their
income, in which case their account balances will be
depleting to the theoretical limit of total depletion.
What we are trying to do here is develop a general
model in which we can introduce labor displacement in
the A+B analysis, which is a departure from steady
state.
--- Jim <jschroeder@shaw.ca> wrote:
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