| Subject: | Re: [socialcredit] Re: underconsumption fallacy | | Date: | Tuesday, September 4, 2007 07:57:23 (-0400) | | From: | Joe Thomson <thomsonhiyu @....ca>
|
| In reply to: | Message 5008 (written by william_b_ryan) |
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.
(Joe asks:-) If banks are a "subset of firms" then in a 'bank as business'
sense would they not be subject to the same conventions of double-entry
accounting as other 'firms'?
And if so, then while the above statement may be correct in terms of
'cash-flow', wouldn't the banks also be "pushing" a sufficient number of
their costs, (for things like their own buildings, new computer systems,
leasehold improvements, etc., etc.), into the future, in a like manner to
the accounting of other 'firms', to still book a profit?
----- Original Message -----
From: <william_b_ryan@yahoo.com>
To: <socialcredit@elistas.com>
Sent: Tuesday, September 04, 2007 8:04 AM
Subject: [socialcredit] Re: underconsumption fallacy
> 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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