|Subject:||Re: [socialcredit] 10 can't pay 11 fallacy, continued|
|Date:||Monday, July 16, 2007 13:14:23 (+1200)|
|From:||Peter <cymric @.......nz>
|In reply to:||Message 4918 (written by william_b_ryan)|
If banks spend by "charging against income" then it necessarily must cancel
down the balance in the income account by the amount of spending by writing
new money cheques.
Business dont charge againt income, they use the income on expenses and that
is money passed on, ie still in circulation, not (reduced) cancelled.
If there isnt a clear system by which banks pay bills then the accountant
needs to know what income is left or really is. The confusion not
clarified here is a mess looking for a place to happen.
This is how the public thought a social credit govt would operate, just
write cheques of new money at everything.
The interest and the 'gap' are paid for by ever increasing debt.
The issue regards interest is being wrongly argued/ represented. I believe
the reason Douglas didnt take issue with interest was simply because it is
the same as profit which all businesses must make. In order to make a
profit there has to be more money in circulation than costs and costs are
inappropriately represented in prices and the consumer is paying more in
costs than aught to which makes the means of finding the profit margin to
cover in prices harder.
The 'gap' includes this profit margin in part at least which is just as
critical as the minimum increase in credit in circulation for the economy to
continue in balance.
The system is totally inadiquate over all as Douglas has explained and this
nonsense about interest is a red herring which will confuss the public and
renders their commonsense incapable of appreciating the A plus B theorem and
thus they will always run off with the monetary reformers because the
dividend and just price is unintelligible because we have mess with their
----- Original Message -----
Sent: Friday, July 13, 2007 4:44 AM
Subject: [socialcredit] 10 can't pay 11 fallacy, continued
> "Therefore, I suggest: a) Two boxes one for the
> principal the other for interest: b) The interest can
> be reused but only paid in full only at the end. c)
> The principal paid cannot be re-used."
> Naturally on these restrictions 10 cannot pay 11. When
> 10 in principal is repaid there is a remaining
> 1 owed that cannot be paid inasmuch as there is no
> money in existence. It must be borrowed thereby
> compounding the debt. That is how this fallacy goes.
> But it doesn't begin to describe the real world
> condition. In the real world banks are members of
> their communities, spending for goods and services
> needed to perform their services and conduct their
> operations, as does every firm in their communities.
> The economy is a great cooperative commonwealth in
> continuous rotation. So, during the period that 1 in
> interest accrues, banks are spending, which increases
> the money in circulation available to pay both
> principal plus interest back to the banks.
> If banks create the money that they loan, they are
> certainly capable of creating the money that they
> spend during the period that 10 is lent and 11 becomes
> due, before they have received the first payment in
> this tortured example. During this period their
> spending is charged against their accrued income
> It's all done according to the rules of double entry
> accounting consistent with the concept of profit and loss.
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