| Subject: | [socialcredit] Re: underconsumption fallacy | | Date: | Tuesday, September 4, 2007 05:04:33 (-0700) | | From: | william_b_ryan <william_b_ryan @.....com>
|
On Aug 31, 2007, at 9:59 AM, new_economics wrote:
...
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.
-
Is this an opinion or a fact? If it's a fact, I would
greatly appreciate if you could point to me links,
urls, etc. that support this statement. Don't
misunderstand me, please. I'm trying to test the
accuracy of your statement, I'm interested in the info
that supports your written words.
-----------------------------------------------
------------------------------------------------
It is fact for the normally expanding economy, where
entrepreneurial spending is increasing. Look once
again at the diagram archived at
http://www.geocities.com/socredus/compendium/accounting_profit.gif
The spending curve leads its reflux, simply because
it takes time for each dollar received as income to be
spent. This means that at each point in time, in
terms of cash flow, the rate of entrepreneurial
spending will exceed sales to the more general public.
Yet firms are always booking a profit because the
rules of double entry accounting allow the expensing
of the spending to be delayed such that it is charged
against future sales which are prospectively greater
than today's spending, yielding a profit. The
entrepreneurial economy in mass production was
impossible before the invention of double entry
accounting.
As to "links, urls, etc.," most of what's on the
Internet is junk or very mediocre. The good stuff is
in copyrighted books and journal articles, which
you'll have to go to research libraries to find. That
information lags by about ten years what specialists
in the field know, who attend conferences and
communicate among themselves. Look for stuff
identified as "Post Keynesian."
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