| Subject: | Re: [socialcredit] Re: Request for William B. Ryan | | Date: | Saturday, December 8, 2007 01:47:53 (-0700) | | From: | Wallace Klinck <wmklinck @....ca>
|
| In reply to: | Message 5126 (written by Swieto Radosci) |
Thanks for your comments and questions, Kristof.
The Social Credit consumption credits will necessarily be cancelled
just as the debt money issued via bank loans is cancelled. In our
credit-based economy business depends upon bank loans in order to
initiate and complete production. Today money created as new bank
loans "compensates", as you say, the premature cancellation of
purchasing-power which is collected via consumer prices and cancelled
by the banks when business repays its production loans--as it must
do. Capital charges in price are allocated at point of retail sale
but do not distribute equivalent new purchasing-power--they do,
however, increase prices. The point is that the physical--the actual
as opposed to financial--cost of goods is fully met when the goods are
completed and ready for consumption and the consuming public should
have combined total income capable of buying the entire completed
output of industry at any given time. Consumption is the purpose and
end of production and the cancellation and final liquidation of
financial production costs necessarily and properly falls upon
consumers. But they must have the financial income to effectively
meet this responsibility. New bank loans do not really "compensate"
for the lack of buying power. They allow consumer access to
production which could not occur without them under the existing
financial regime--but they constitute a financial obligation which
must be charged against future cycles of production, increasing their
financial costs and prices accordingly. When money is collected via
retail prices in respect of capital goods and cancelled in the
repayment of old loans we are erroneously canceling the financial
representation of capital before the actual physical capital has
depreciated or worn out. The cancellation rate of money is too
rapid. The implication is that we consume our capital concurrently
which suggestion is at variance with reality because capital
depreciates over a long period of time. The Social Credit consumption
credits will allow the repayment of business loans but, not being
issued as debt, will not be an inflationary charge against future
cycles of production as are the bank loans of today upon which we are
compelled to rely merely to continue our economic activities.
The Douglas analysis which reveals an inherent deficiency of
purchasing-power in the normal operation of the price-system as it
operates under the present system which issues money only as debt also
reveals the absurdity of a "balanced budget." Under existing
financial cost-accountancy rules, a balance budget means, in fact, (1)
that the economy is static, (2) that we consume all of our capital
currently and (3) that, ultimately, the issuer of credit, i.e., the
banking system owns all capital. These premises are neither credible
nor acceptable. The amount of consumer credits which would be
issued in a Social Credit dispensation would be variable from one
accountancy period to another according to statistically determined
variations in the ratio of production to consumption. Insofar as
taxation is actually used to reduce the principal of government debt
this does in fact result in a cancellation of money collected from the
public. Essentially, it is incorrect to think of money as
"circulating" in a credit-based economy. It actually is issued and
cancelled, flows and ebbs, is created and destroyed with the
initiation and completion of production and purchase of the latter by
consumers. Of course, government expenditures are made not merely to
provide desired services and amenities but more and more to "fuel" or
"pump-prime" the economy. The floating debt of the community is
"relieved" by its increasing conversion to permanent and increasing
state debt with the accompanying increasing centralization of control
over the financial and real credit of society--and an increasing
burden of taxation required to service this essentially fraudulent
debt load. The true cost of production is consumption which is
progressively less than production--and the purpose of an economy is
not to provide "work" but rather to provide a consumer-desired amount
of economic affluence with minimal effort and expenditure. It is
quite irrational and mathematically impossible to expect the consuming
public to purchase with its earned income the product of industry when
human labor input is diminishing relative to non-labor "capital"
factors--when financial price increasingly includes capital items in
relative to labour costs, i.e., earned financial incomes. The national
accountancy changes proposed by Social Credit are not primarily
related to the profits of Banks and address much more fundamental
issues.
I will forward to you separately an article from The Social Crediter
titled "The Cancellation Bogey."
Sincerely
Wally Klinck
On 7-Dec-07, at 4:39 PM, Swieto Radosci wrote:
> Thank you Wally, for your explanation.
>
> The question intreresting to me is how Social Dividend disappears if
> not via repayment of loans, as it happens now when money returns to
> banks as repayment of bank loans. Present-day money disappears while
> repayment occurs and must be reinjected as new loans to compensate
> its lost. If not, it disappears from the market, as it was in early
> days of crisis of 1920-ties. Taxes recycle money through
> governments, not cancel them. So - how Dividend is going to be
> withdrawn from the market, after being created not as a debt.
>
> It is huge amount of money - some US& 3,77 trillion pumped every
> year in US economy as new loans, being ca 30% of US GDP, according
> to estimations made in Richard Cook's articles. And not so much but
> almost so much disappears each year from the market as repayment of
> banking loans.
>
> How will 3,77 trillion Dividend disappear each year to stem
> inflation? Accounting adjustments could work but only as adjustments
> made from banking profits (diminishing them). Are present US banking
> profits so high? And are banking elites going to liquidate them?
>
> Sincerely
> Kristof
>
>
> ----- Original Message ----- From: "Wallace Klinck" <wmklinck@shaw.ca>
> To: <socialcredit@elistas.com>
> Sent: Friday, December 07, 2007 9:57 AM
> Subject: Re: [socialcredit] Re: Request for William B. Ryan
>
>
>> Kristof, if I might intercede, credit does not necessarily denote
>> debt in Social Credit terminology. We recognize two forms of
>> credit, viz., "real credit" meaning the actual ability of society
>> to deliver goods and services "as, when and where required" and
>> "financial credit" meaning the ability to deliver money "as, when
>> and where required." The two should match. C. H. Douglas,
>> founder of Social Credit, formalized in his "A + B Theorem" an
>> explanation of how the normal operation of the existing price-
>> system leads to a rate of flow of financial prices emanating from
>> industry which increasingly exceeds the rate of flow of effective
>> consumer incomes. This growing disparity is to be compensated by
>> new consumer credits which are non- repayable by the recipient
>> consumers and would be made available to all citizens in the form
>> of a National (Consumer) Dividend and what Douglas referred to as
>> the Compensated Price, the latter being also an issue of non-
>> repayable consumer credits to businesses at point of retail on
>> condition that retail price be lowered. These new consumer
>> credits are to be created by an appropriate statistical
>> institution, e.g., a branch of the Treasury or a National Credit
>> Office and paid from a National Credit Account which would be a
>> statistical record of all the nations real assets--anything which
>> could become a cost of production. The payment of the Dividend
>> and Compensated Price would be drawn on the National Credit
>> Account and as an item of consumption would diminish it. The
>> National Credit Account would be increased by the addition of all
>> new capital assets and would be growing more rapidly than
>> deductions from it. Today, the widening disparity between prices
>> and incomes is "bridged" in a haphazard manner by new credits
>> issued as ever increasing debt to the banking system. While this
>> new "money" issued as debt allows consumer access to a large part
>> of production, it does not cancel the financial costs of
>> production but merely passes them on as inflationary charges to be
>> recovered from future cycles of production--even though the actual
>> physical costs of each production cycle have fully been met when
>> consumer goods are completed in final form for use by the
>> consumer. The Social Credit consumer credits will be cancelled as
>> purchasing-power when the retailer pays his production loan just
>> as are the credits issued as debt today via bank loans are
>> cancelled. I will send you some documentation in PDF format which
>> may be of assistance to you in understanding the Social Credit
>> position. Essentially, under the existing orthodox financial
>> regime the consumer is charged, quite properly, with capital
>> depreciation--but quite wrongly not credited with capital
>> appreciation. Over to Bill who may have his own comments to make
>> on the subject.
>> Sincerely
>> Wally
>>
>> On 6-Dec-07, at 2:23 PM, Swieto Radosci wrote:
>>
>>> Thanks, Bill, for your kind reply.
>>>
>>> Could you explain what you mean by "accounting adjustments by
>>> rationally applied credits from the
>>> central bank to the accounts of final consumers". Is that credit
>>> interest bearing and who is going to get it - all citizens or
>>> fraction of them. Is it repayable?
>>> If not repayable - is that non-repayment called " accounting
>>> adjustment"?
>>>
>>> regards
>>> Kristof
>>>
>>> ----- Original Message ----- From: <william_b_ryan@yahoo.com>
>>> To: <socialcredit@elistas.com>
>>> Sent: Monday, November 26, 2007 8:41 PM
>>> Subject: Re: [socialcredit] Re: Request for William B. Ryan
>>>
>>>
>>>> I thought I gave you a serious answer, Kristof. I
>>>> certainly didn't intend it to be a joke.
>>>>
>>>> The best financial reform is along the lines of
>>>> Douglas' national dividend and retail discount
>>>> programs.
>>>>
>>>> I am quite disdainful of most of what passes as
>>>> "monetary reform," which generally involves some
>>>> fundamental change to the structure of the financial
>>>> system, such as the abolition of interest, and/or the
>>>> spending of money into circulation exclusively by the
>>>> government. The structure of the present financial
>>>> system is itself very nearly perfect.
>>>>
>>>> The problem is at the macreconomic level due to a flaw
>>>> in accounting, where the costs of production are being
>>>> expensed against retail sales at an accelerating rate
>>>> in respect to sales, which is explained through the A
>>>> + B theorem, or something similar.
>>>>
>>>> The solution are , in a
>>>> form of accounting adjustment, boosting effective
>>>> demand, bringing the expensing of costs to the point
>>>> of retail into proportionality with sales, thereby
>>>> sustaining the rate of profit in the dynamically
>>>> growing economy, with naturally occurring labor
>>>> displacement.
>>>>
>>>> The present continuous fall to the rate of profit
>>>> induces entrepreneurs to continually pinch off
>>>> production short of real demand and productive
>>>> capacity, causing the permanency of poverty in the
>>>> midst of plenty through much waste of resources. It
>>>> is an illusion of scarcity due to financial
>>>> inadequacy.
>>>>
>>>> Beyond that I would suggest a protectionist foreign
>>>> trade policy, protecting domestic industry against
>>>> predatory foreign competition. The strength of the
>>>> American economy was built during the nineteenth
>>>> century behind a tariff wall, allowing free trade and
>>>> competition between the states, with similar cultures
>>>> and standards.
>>>>
>>>> Bill
>>>>
>>>>
>>>> --- Swieto Radosci <radosc@radosc.x.pl> wrote:
>>>>
>>>>>
>>>>> From: <william_b_ryan@yahoo.com>:
>>>>> > I think I said, Kristof, that I do not call myself
>>>>> a
>>>>> > social crediter, but do admit to being profoundly
>>>>> > influenced by the writings of . I do not
>>>>> > admit to agreeing with every word that he wrote,
>>>>> but
>>>>> > admit to not understanding much of it. One of the
>>>>> > purposes of this list is to help us gain an
>>>>> > understanding of what he really wrote and said.
>>>>>
>>>>>
>>>>> The undrerstanding of what C. H. Douglas wrote or
>>>>> said is not of my
>>>>> particular concern. More what today reformists do
>>>>> with his inspirations and
>>>>> inuitions.
>>>>>
>>>>> I agree with Douglas's general idea of the deficit
>>>>> of purchasing power in
>>>>> the growing areas of the globe. I calculated that
>>>>> deficit on real numbers
>>>>> taken from Polish corporation where I served as CEO
>>>>> and for sure Douglas was
>>>>> right showing us this problem comparable to the
>>>>> unefficiency of heart-pump
>>>>> in human body. Purchasing power leaks out of
>>>>> producing communities and
>>>>> producers are forced to extend specialization and
>>>>> import-export practicies.
>>>>> If they don't, they alternatively hang on growing
>>>>> debt.
>>>>>
>>>>> Now we have world-blood deficit in many places and
>>>>> plentitude of it in
>>>>> others - a zero balance situation from the double
>>>>> accounting point of view,
>>>>> but close to heart breake from the social one. I
>>>>> personally attribute that
>>>>> deficit of purchasing power to logistic (energetic)
>>>>> and educational
>>>>> (informatic, including money as information)
>>>>> problems of our civilization.
>>>>> In my opinion local money could serve better than
>>>>> "retail discount programs"
>>>>> proposed by Douglas - as local by-passes on global
>>>>> defficiency in money
>>>>> distribution.
>>>>>
>>>>> National dividend is ok but it strongly affects the
>>>>> way national budget is
>>>>> created, so it is not easy to implement from
>>>>> grassroots.
>>>>>
>>>>> But, William, I asked you about your personal
>>>>> opinion on Douglas proposals
>>>>> in present socio-legal environment and you answered
>>>>> by a joke... Please
>>>>> answer seriously.
>>>>>
>>>>> Kristof Levandovski
>>>>
>>>>
>>>>
>>>> ____________________________________________________________________________________
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>>>> ---------------------------------------------------------------------
>>>> Some introductory materials to the discussion topic of this list
>>>> are at
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>>>> socialcredit
>>>>
>>>>
>>>>
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>>>>
>>>
>>> ---------------------------------------------------------------------
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>>> are at
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>>> For more information, visit http://www.eListas.com/list/socialcredit
>>
>> ---------------------------------------------------------------------
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>> are at
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>> You're subscribed to this list with the email radosc@waw.pdi.net
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>
> ---------------------------------------------------------------------
> Some introductory materials to the discussion topic of this list are
> at
> http://www.geocities.com/socredus/compendium
> You're subscribed to this list with the email wmklinck@shaw.ca
> For more information, visit http://www.eListas.com/list/socialcredit
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