| Subject: | [socialcredit] underconsumption fallacy | | Date: | Friday, August 31, 2007 05:14:07 (-0700) | | From: | william_b_ryan <william_b_ryan @.....com>
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"At the end of the last payback period borrowers with
the slowest business lose their collateral in direct
proportion to retained profits of other participants.
This last includes particularly, the unspent interest
earnings of the banker."
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This argument of yours is something quite different
than the simplistic and rather stupid argument that
ten can't pay eleven, but that bankers and "other
participants" accumulate "retained profits."
Presumably, if bankers and "other participants" could
somehow spend all of their income as soon as they
receive it, there wouldn't be a problem.
This dilemma was resolved through the invention of
double entry accounting and the development of modern
creditary mechanisms beginning some eight hundred
years ago (See the diagram archived at
http://www.geocities.com/socredus/compendium/accounting_profit.gif
which enable firms including banks to spend in advance
of income, yet continually book a profit.
For banks, as a subset of firms, their spending is for
salaries, wages and ordinary business expenses,
including interest paid to depositors, which, when
plotted as a curve, is always GREATER,
instantaneously, than its reflux in terms of interest
and other fees being paid by the more general public
to the banks. Yet the banks are always booking a
profit according to the rules of double entry accounting.
____________________________________________________________________________________
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http://get.games.yahoo.com/proddesc?gamekey=monopolyherenow
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underconsumption f
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