|
Radu:
I will respond in red.
----- Original Message -----
Sent: Friday, February 18, 2005 10:57
PM
Subject: Re: [socialcredit] Re: The MacMillan
Presentation follow up
> Jim,
> Thank you for defending me
against Mr. Ryan. It a sign
> of noblesse to respect your opponent even
you do not
> agree with him.
>(reply) Debate
should never be about personal attacks - I agree. And I'm trying to smooth
things over so that you see what Douglas was saying, because although he wrote
along time ago, he was WAY ahead of his time, and his ideas are so
revolutionary, that you have to actually disregard most everything you may have
learnt about orthodox economics to actually understand it. It means that
much of what we learn is factually incorrect, and Douglas proposes are more
factually correct hypothesis.
>
Maybe some of the disagreement is around semantics.
> Also, do not forget
Douglas express his ideas 50 years
> ago. Since then things changed and
terms not
> necessarily bear the same meaning. I am not an expert
>
but I know for sure fractional reserve system did not
> exist during
Douglas time.
>
(reply) I see Bill
addressed this point in his usual "style", but he is in fact correct.
Fractional reserve banking has been around since the middle ages when bankers
realized that they could lend out more money than they had in cold coin in
"reserve". Do a quick search on the history of fractional reserve banking
on the internet, and it will confirm this fact.
> I am not an
accountant but I took accounting courses
> and also I run a business.
Correct me if I am wrong.
> To me capitalized costs are just an accounting
'trick'
> and do not express the exact flow of money. When you
>
purchase a fixed asset for $1000 that you must
> depreciate over 10 years,
you may expense $100 this
> year. If you has sales of $10,000 and costs,
including
> the asset of $10,000. You would say that you broke
>
even. That is what the cash flow is: what you received
> you paid back.
Because you must capitalized the $1000
> your paper expenses are $9100 and
you made a profit of
> $900. Next year if you have no activity at all,
no
> sales, no expenses, you just take a 365 days vacation,
>
because of the depreciation of the $1000 asset you
> will have, on paper,
an expense of $100. So your
> business lost money where there were no
money moved.
> It is all on paper. Even more, capitalized assets
can
> be sold at above or below price than their actual
> 'book
value'.
> There is no effect on purchasing power from
>
depreciation, nobody can use the amount to purchase
> anything. Yes there
is an effect on profit and taxes
> from depreciation but not on purchasing
power.
> Like Bill stated previously, the need to
capitlize costs is very essential, but now you are beginning to see the problem
that Douglas identified. And it is true regardless of "savings" or
"retained earnings". I will quote from his book "Social Credit" (which is
available for free online at mondopolitico.com) :
The repayment of bank loans, unaccompanied by the destruction of the
article produced as a result of its creation, immobilises an equivalent body of
price values, so that neither can the articles to which the prices refer be
sold, nor in the case of machinery, etc., is it possible to make any charges in
respect of consumption goods which are consequent on the use of such machinery,
without still further increasing the disparity between the goods available
still, and the money available to buy them.
This is surely plain enough; but it has also to be remembered that this
process of repayment of bank loans, is a "chain" process, which starts with the
repayment, by the last business concern engaged in the manufacture of the
articles, of the costs and profits incurred by the stage of manufacture
immediately preceding it. If this operation be clearly visualised, it will be
seen that all payments of costs of goods supplied by one business firm to
another business firm for re-sale, can be assumed to be the repayment of bank
credit, if the first stage in the manufacture of the goods was financed by a
bank credit. But we can go further and say, that the difference
between finance by bank credit, and finance from so-called capital or savings,
is only one of degree and not of kind, since those very savings, as will be seen
by a careful examination of the foregoing argument, had their origin in a
creation of credit.
We
may now be in a position to appreciate the bearing of the foregoing analysis on
such theories as those of Mr. J. A. Hobson. We have seen that the factor which
modifies so profoundly the importance of the considerations adduced by Mr.
Hobson, is that the inadequacy of the money available in the hands of the,
public to buy the goods normally available, at the prices necessitated by the
system under which they are costed, is countered by the ability, and the normal
practice of banking and financial institutions to create and circulate forms of
purchasing-power which function quite as effectively as the sovereign or the
treasury note. This circulation largely functions through wages and salaries
paid out in respect of capital production or goods destined for export.
Unlike the sovereign, or the currency note, however, these forms of
bank-created purchasing-power, are nearly always redeemable within a definite
period of time. It is a feature on which the banks place the most weighty
importance; and exactly why this is so is worthy of, and will receive, close
consideration in a succeeding chapter
I suggest you take the time to read this book Radu, if
not only for interest sake. I believe you will find Mr. Douglas very
enlightening. That being said, you will notice that Douglas addresses the
concept of "savings" and refutes that it is the essence of what he is
saying. There are two things to keep in mind:
1) There are two costs. Consumer costs which are
cancelled upon purchase. And capital costs which are "capitalized" and
carried forward in time.
2) There is a "double circuit" of money based on
the fact that most money is "credit" that banks create as a debt. And as
such, there is always money being cancelled at a rate which the bank
determines.
With these two things in mind, the point to comprehend
is that if the credit which was created in order to create a capital good is
cancelled before the cost that was created goes into the final consumer good in
which the price/cost is cancelled permanently, then there is a disequilibrium
between purchasing power and price.
> Do not take Douglas words literally. Look at the
> meaning,
the spirit what they represent. In the
> MacMillan presentation he also
refers to retained
> earnings in the same way he refers to
capitalized
> costs. They are quite different because retained
>
earnings are money withdrawn from the flow and hidden
> in the safe, saved
for later.
>
Douglas' words are to be taken literally. The man
was a genius. It just takes time to understand exactly what he was
saying. Again, refer to the quote I posted in regards to
savings.
>
> I wish you well Jim, you are a good
man.
> Radu
>
Thank you. Take care Radu.
Jim
> > --- Jim < jschroeder@shaw.ca> wrote:
>
> > Sorry, I hit send instead of paste:
> >
> >
Radu:
> >
> > There is no inbalance in your example because
there
> > is no capitalized cost. Also, like I said, it does
>
> depend where money comes from because if the loan is
> > recalled
before the final consumer good makes it's
> > way to the
market,
> > then there is a inbalance. I guess maybe
we're
> > arguing "semantics" between savings and capitalized
>
> costs. Someone doesn't "save" unless they intend to
> > put
the cost of that product in another product.
> > Someone doesn't
"save" and purchase a car. A
> > company saves when it purchases
fixed assets, and
> > then enters them as an asset and depreciates
them
> > over the couse of their intended life. This is
the
> > inbalancing factor I agree, and Douglas states it
> >
when he says:
> >
> > "4474. Mr. Keynes: If they are paid
through another
> > business, then that business will pay the amount
as
> > part of its cost of production to individuals? Is
> >
that it?
> >
> > Douglas: Yes, I quite understand the
difficulty. The
> > real weight to be attached to this
undoubted
> > statement of fact is whether the transfers from
one
> > firm to another are financed by either trade credit,
>
> or from a firm's own credit, let us say it's working
> > capital,
or by a bank's credit. The exact weight
> > which that has in the whole
of the statements
> > depends on a very large extent on that. If
B
> > payments are really financed from working capital,
> >
then that working capital must, I think, inevitably
> > have been
obtained by the process of investment
> > which is criticized under (b)
in the same precis.
> > That is to say, the whole of the savings which
have
> > formed the working capital of that concern must
> >
previously have appeared in the cost of production."
> >
> >
Douglas, and A+B, are saying that "fixed assets" are
> > creating
prices in which there is no equivalent
> > income, because the cost is
capitalized. I'll again
> > quote from the MacMillan
Commission:
> >
> > 4477. Mr. Keynes: It's working capital is
required
> > to meet its expenditure under Group A during the
>
> period of production just as much as Group B, so
> > what you are
saying now does not seem to me to
> > distinguish between Group A and
Group B?
> >
> > Douglas: Yes it does, because in Group A you
are
> > paying out to the consumer; all the payments under
> >
Group B are purchasing power, which, if it was
> > obtained by
re-investment, was originally in the
> > hands of the public and never
gets back into the
> > hands of the public at all.
> >
> > 4486. Mr. Keynes: And if in the interval you had to
> >
have new machines to replace old ones you would have
> > to have
individuals to produce them. How does that
> > differ from any other
form of consumption?
> >
> > Douglas: Because you are not
starting from zero. You
> > are starting from a world as is.
>
>
> > 4487. Mr. Keynes: How does that bear on the matter?
>
>
> > Douglas: It bears on the matter that you have a
> >
tremendous amount of real capital which at the
> > present time is
creating prices and which has not
> > contributed anything like that
amount of purchasing
> > power.
> >
> >
>
>
> > 4488. Mr. Keynes: Do you mean that the receipts of
>
> capital are greater than the amount it pays out in
> >
dividends?
> >
> > Douglas: Yes, that is an obvious statement
of fact;
> > the accounts of any company will show that.
> >
> > 4489. Professor Gregory: What happens to the
> >
difference?
> >
> > Douglas: It is represented by the fixed
assets in
> > the company which it cannot distribute in the
form
> > of money.
> >
> >
> > I really
like this analogy used by Douglas as well:
> >
> > 4494.
Professor Gregory: It has made $10,000 profit?
> >
> >
Douglas: Of course it has made $10,000 assets. This
> > is jumping from
money to the goods all the time: it
> > has made certain prices, things
to which you attach
> > prices and which are valued in its assets as
lets
> > say $8000. But the money portion of those assets
> >
does not amount to $10,000, and it has already
> > recovered the cost
of them from the consumer. It is
> > exactly the same thing as going to
a man who has had
> > 30,000 acres of land left him by will and
saying,
> > "That is $1 dollar an acre; now you have got to pay
>
> $10,000 in death duties." The man has not got
> > $30,000. He has
got 30,000 acres of land which has a
> > price of $1 an acre. He has
not got $30,000.
> >
> >
> >
> > Perhaps
we are in agreement and don't know it
> > because of the use of
different sematics. Do you
> > agree with the above conclusions
by Douglas?
> >
> >
> >
> > Take
care,
> >
> >
> >
> > Jim
> >
> > ----- Original Message -----
> > From: "Radu Seserman"
<radudelona@yahoo.com>
> >
To: <socialcredit@elistas.com>
>
> Sent: Tuesday, February 15, 2005 10:27 PM
> > Subject: Re:
[socialcredit] Re: The MacMillan
> > Presentation follow up
>
>
> >
> > > Sorry Jim,
> > > You quite
miss what I was saying. You continue to
> > look
> > > at
portions of the economic cycle and draw wrong
> > > conclusions.
Also by not being concerned where the
> > > money come from, it
means we do not care where the
> > > bank has the money and not that
money should not
> > be
> > > repaid as you understood.
Actually if you read all
> > my
> > > post you will see all
money are paid back to the
> > bank.
> > > If you can find
any imbalance in the model I
> > > presented, I will review my
position, otherwise I
> > wish
> > > you well.
> >
> --- Jim <jschroeder@shaw.ca> wrote:
>
> >
> > > > Radu:
> > > >
> >
> > Your argument depends on this simple thesis:
> > > >
> > > > You state, "We are not concerned where
> > >
> the money is coming from because is FIAT money,
> > the
>
> > > bank can make it out of thin air."
> > > >
> > > > That is where you are mistaken. We are
>
> concerned
> > > > where the money comes
> > >
> from, because if it comes from the bank as
> > credit
> >
> > (which most money does),
> > > > then it needs to be
REPAID, and if:
> > > >
> > > > "....any portion
of the loans concerned in any
> > stage
> > > > of the
production of an
> > > > article is repaid to a bank before the
articles,
> > > > into the cost of which they
> > >
> enter, has finally and irrevocably been sold to
> > its
>
> > > ultimate consumer."
> > > >
> > >
>
> > >
> >
> http://www.capitalownership.org/lib/DouglasBankers.pdf> > > >
> > > > Then you have a
disequilibrium. And the only
> > remedy
> > > >
is:
> > > >
> > > > "In order either to resell it
(in addition to
> > normal
> > > > trade in new
articles)
> > > > or to use it in such a way that it forms a
cost
> > in
> > > > production, a fresh loan
>
> > > has to be granted upon it."
> > > >
> >
> >
> > >
> >
> http://www.capitalownership.org/lib/DouglasBankers.pdf> > > >
> > > > But the "fresh
loan" creates a new set of costs,
> > so
> > > > if the
fresh loan is
> > > > used to cancel a previous set of costs,
then it
> > > > can't be used to cancel the
> > >
> costs it generated in it's coming into
> > existence.
> >
> >
> > > > Again, the problem is that the costs
are
> > > > capitalized.
> > > >
> >
> > Look at the example Douglas gave, and I'll
> > modify
it
> > > > slightly:
> > > >
> > >
> Imagine I borrow $1000 from the bank, and ask
> > > >
someone to build a house for
> > > > me. In exchange for
the house, I give the
> > worker
> > > > $1000. I
have a debt of
> > > > $1000, I have a house, and the worker now
has my
> > > > $1000. Pretend I re-sell
> > >
> it back to him. So now the worker has the
> > house,
>
> > > and I have the $1000, and
> > > > I still have
$1000 debt. Now suppose I cancel
> > the
> > > >
debt so that the $1000
> > > > ceases to exist. There are
two possible
> > scenarios:
> > > >
> > >
> 1) The worker just lives in the house and
> > > >
"consumes" it as it depreciates.
> > > > In this scenario,
everything balances because no
> > > > cost is carried forward
in
> > > > another production cycle because the cost of
>
> > > consumer goods are cancelled
> > > > upon
purchase.
> > > >
> > > > 2) The worker
uses the house to make shoes (as
> > in
> > > > Douglas'
example). He
> > > > then enters the house as an "asset" on
his
> > books,
> > > > and depreciates it over
>
> > > the course of the entire life of the house.
> >
This
> > > > depreciation expense is
> > > > then
added into the price of his shoes; however,
> > he
> > >
> is creating a cost which
> > > > he does not pay out in the
form of any income
> > (wage,
> > > > dividend,
interest).
> > > > It is simply a price value that exists
where
> > income
> > > > does not. And it
exists
> > > > because the house was "capitalized" (i.e.
>
> accounted
> > > > as an asset, and
> > > >
expensed as depreciation in the cost of the
> > shoes).
> >
> > In this example
> > > > prices>income, and
B>0.
> > > >
> > > > If I had not paid back
the original $1000 to the
> > > > bank, then there would
be
> > > > enough money to cover the depreciation costs
of
> > the
> > > > house which show up in
> >
> > the shoes, but then there would also be $1000
> >
debt
> > > > that is not paid back.
> > > >
> > > > Take care,
> > > >
> > >
> Jim
> > > > ----- Original Message -----
> > >
> From: "Radu Seserman" <radudelona@yahoo.com>
> >
> > To: <socialcredit@elistas.com>
> > > > Sent: Tuesday, February 15, 2005 4:16
AM
> > > > Subject: Re: [socialcredit] Re: The MacMillan
>
> > > Presentation follow up
> > > >
> > >
>
> > > > > Hello Jim,
> > > > > I am
sorry Jim but you only choose to see only
> > > > part of
>
> > > > the equation and then say 'the rest is
> >
missing'.
> > > > It is
> > > > > like looking
at a house from outside, you see
> > one
> > > >
or
> > > > > two walls and then think the house will
>
> collapse.
> > > > If
> > > > > you go
around the corner you will find a new
> > wall
> > > >
but
> > > > > forget about the one you just lost sight
of.
> > > > > What is missing in Douglas explanation is
the
> > fact
> > > > > that by creating the loan you
create the equal
> > > > amount
> > > > > of
purchasing power.
> > > > >
> > > > > Look
at a full economic cycle described in the
> > > > model
>
> > > > below and you will see there is problem. Just
> >
you
> > > > have
> > > > > to consider the
whole cycle and not just
> > pieces of
> > > >
it.
> > > > >
> > > > > Lets assume that the
'economy' is formed by a
> > > > bank,
> > > >
> company X and company Y. Lets analyze a full
> > > >
economic
> > > > > cycle:
> > > > >
>
> > > > Company X makes $900 loan to pay $500 wages +
> >
$400
> > > > B
> > > > > costs. The company
will pay $100 dividends. So
> > > > company
> > >
> > X will sell their output for $1000(production
> > > >
costs +
> > > > > wages + dividends). The B costs can only go
to
> > > > company
> > > > > Y. The $400 can be
viewed as prepayments for
> > > > supplies
> > > >
> (this is contra-intuitive but analytically
> > > > correct)
or
> > > > > they are more realistically payments to
close
> > a
> > > > > previous economic cycle. So by
using the $400
> > to
> > > > close
> > >
> > out the previous economic cycle we take $400
> > out
>
> > > of
> > > > > this cycle. At the end we will
need to be $400
> > > > short
> > > > > for our
economic cycle, so overall everything
> > > > balances
>
> > > > out. What we give to previous cycle in cash we
> >
> > have to
> > > > > receive back from a future
cycle. What goods
> > we
> > > > > trasfer in from
previous cycle we must
> > transfer
> > > > out
to
> > > > > a future cycle. We are now in
'current'
> > cycle.
> > > > > Lets go back to our
cycle. We are not
> > concerned
> > > > where
>
> > > > the money is coming from because is FIAT
> >
money,
> > > > the
> > > > > bank can make it
out of thin air. So company A
> > > > workers
> > >
> > received $500. They will spend them $150
> > buying
>
> > > > company X output and the balance of $350 will
> >
be
> > > > > available to buy company Y output.
> >
> > > Company X at this point has a loan of a $900,
> >
sold
> > > > > $150 worth of products therefore has $150
cash
> > and
> > > > > products worth $850. They can
pay now $100
> > > > dividends
> > > > > so
they are left with $50 plus the product not
> > > > sold
>
> > > > yet.
> > > > > So lets recap where we are
at this point:
> > > > > - the bank has a loan $900
>
> > > > - company X paid A & B type payments, has $50
>
> > > cash,
> > > > > products worth $850, a loan to
be paid of
> > $900.
> > > > > - purchasing power
available in the system:
> > $350
> > > > wages
>
> > > > not spent, $100 dividends not spent
> > > >
> - $400 'lent' to previous economic cycle
> > > >
>
> > > > > Now company Y comes into play. It has
no
> > savings
> > > > so it
> > > > >
will have to borrow the entire amount need to
> > do
> > >
> > business, as company X did. So will borrow
> > lets
>
> > > say
> > > > > $1500. It will buy $625 materials
from company
> > X
> > > > and
> > > >
> will pay as A type payments $875. For
> > > >
simplification
> > > > > dividends are included in wages. So X
company
> > has
> > > > > $1500 worth of products to
sell.
> > > > > Lets recap again where we are:
> >
> > > - the bank has $2400 in loans ($900 + $1500)
> > >
> > - company X has $675 in cash and $225 worth of
> > > >
> products and a loan to pay of $900
> > > > > - company Y
has $1500 worth of products and a
> > loan
> > > >
to
> > > > > pay of $1500
> > > > > -
purchasing power available: $350 unspent
> > wages
> > >
> from
> > > > > company X, $100 unspent dividends from
company
> > X,
> > > > $875
> > > > >
A type payments from company Y, for a total of
> > > >
$1325.
> > > > > - $400 'lent' to previous economic cycle
for
> > goods
> > > > > transferred to current
economic cycle.
> > > > >
> > > > > So
company X sells its last products for $225
> > and
> > >
> pays
> > > > > off the loan. Available purchasing
power
> > becomes
> > > > $1100
> > > >
> that is applied toward company Y products and
> > we
> >
> > are
> > > > > left with $400 worth of products that
have to
> > be
> > > > > transferred to the next
economic cycle as we
> > need
> > > > to
> >
> > > offset the initial transfer from the previous
> > >
> cycle.
> > > > > As we do this transfer and move into the
next
> > > > cycle
> > > > > company Y sells
all its products and pays off
> > its
> > > > >
loan.
> > > > >
> > > > > So Jim, there is
no money missing, everything
> > > > balances
> > >
> > out as long as everybody is spending and
> > nobody
is
> > > > > saving money. You can take this model and
>
> multiply
> > > > > infinitely and it will operate with no
flaw.
> > You
> > > > can
> > > > >
add more participants to cycle, enhance the
> > model
> > >
> with
> > > > > more elements as interest which will
convert
> > to A
> > > > type
> > > >
> payments at the bank, lost production which
> > will
> >
> > > reduce dividends, etc.
> > > > > The only
problem with this model is the very
> > first
> > > >
set
> > > > > of supplies, you remember when company X
>
> purchase
> > > > $400
> > > > > worth of
goods from previous cycle; where it
> > comes
> > > >
> from. I guess we are today lucky enough that
> > at
> >
> > the
> > > > > beginning of human kind they did not
know much
> > > > about
> > > > > economics and
at a moment grabbed a branch
> > from a
> > > >
tree
> > > > > to start 'producing' food.
> > >
> >
> > > > > My best wishes,
> > > >
> Radu Seserman
> > > > >
> > > >
>
> > > > >
> > > > > --- Jim
<jschroeder@shaw.ca> wrote:
>
> > > >
> > > > > > Hi Radu:
> > >
> > >
> > > > > > Yes, the workmen acquired the
house, and
> > because
> > > > > > they
capitalized the costs of the house,
> > those
> > > >
costs
> > > > > > were carried forward in the cost of
the
> > shoes.
> > > > If
> > > > >
> they merely chose to consume the house, as
> > most
> >
> > > > people do, then the cost would not be
> >
carried
> > > > > > forward.
> > > > >
>
> > > > > > Let me give you another example. If
you buy
> > a
> > > > bag a
> > > > >
> potato chips, one the bag is purchased, the
> > cost
> >
> > > > disappears. However; when the potato
chip
> > > > company
> > > > > > buys a
potato, the cost of the potato does
> > not
> > > > >
> disappear, it is carried forward into the
> > cost
> >
> > of
> > > > > > the potato chip.
> > >
> > >
> > > > > > If the workers just decided to
live in the
> > > > house,
> > > > > > then
the cost of the house would not have
> > been
> > > >
> > "capitalized" and carried forward in any
> > other
>
> > > > > consumer good. But because the house was
>
> used
> > > > as a
> > > > > > factory
for shoes, it's depreciation expense
> > was
> > > >
put
> > > > > > into the cost of the shoes.
> >
> > > >
> > > > > > I must add one other
qualifier. It's also
> > > > important
> > >
> > > to note that the original bank loan that
> >
created
> > > > the
> > > > > > money for
the house was paid back (i.e
> > Douglas
> > > > >
> ripped up the money). If that loan remained
> > > >
unpaid
> > > > > > for the entire time the factory
was
> > producing
> > > > shoes,
> > > >
> > then the $1000 would still exist, and the
> > money
>
> > > > > necessary to cancel the cost of the
> > >
> depreiciation
> > > > > > expense added into the shoes
would
> > disappear.
> > > > > >
> > >
> > > A+B is described brilliantly by Douglas in
> >
this
> > > > > > succinct paragraph:
> > > >
> >
> > > > > > "This is exactly what happens when
any
> > portion
> > > > of
> > > > >
> the loans concerned in any stage of the
> > > >
production
> > > > > > of an article is repaid to abank
before the
> > > > > > articles, into the cost of which
they enter,
> > has
> > > > > > finally and
irrevocably been sold to its
> > > > ultimate
> > >
> > > consumer. In order either to resell it (in
> > > >
addition
> > > > > > to normal trade in new articles) or to
use
> > it in
> > > > > > such a way that it forms
a cost in
> > production, a
> > > > > > fresh loan
has to be granted upon it."
> > > > > >
> > >
> > > I will also say that Bill's problem he
> >
describes
> > > > as
> > > > > > labour
displacement means that B costs are
> > > > > > constantly
becomming a greater portion of
> > the
> > > >
cost
> > > > > > of goods. And the problem described
by
> > Douglas
> > > > is
> > > > >
> becomming more and more urgent to address.
> > But
> >
> > I
> > > > > > will say that B costs would exist
without
> > labour
> > > > > > displacement, and
that it is their mere
> > > > existence
> > > >
> > which makes price > income, because the only
> > > >
income
> > > > > > that exists in any time period is
what
> > Douglas
> > > > > > called A
costs.
> > > > > >
> > > > > > Take
care,
> > > > > >
> > > > > >
Jim
> > > > > >
> > > > > > -----
Original Message -----
> > > > > > From: "Radu Seserman"
<radudelona@yahoo.com>
> >
> > > > To: <socialcredit@elistas.com>
>
> > > > > Sent: Sunday, February 13, 2005 6:49 PM
> >
> > > > Subject: Re: [socialcredit] Re: The
> >
MacMillan
> > > > > > Presentation follow up
> >
> > > >
> > > > > >
> > > > >
> > The workmen paid $1000 to purchase the
> > house,
>
> > > do
> > > > > > you
> > > >
> > > remember? He could not depreciate
> > something
he
> > > > did
> > > > > > not
> >
> > > > > acquire. If the house would just pop-up in
> >
his
> > > > > > back
> > > > > > >
yard as gift, act of god, donation etc. he
> > > > could
>
> > > > > not
> > > > > > > depreciate
it.
> > > > > > > Sorry, but for me your argument does
not
> > > > stand.
> > > > > > >
>
> > > > > > Radu Seserman
> > > > > >
>
> > > > > > > --- Joe Thomson <thomsonhiyu@shaw.ca>
> >
wrote:
> > > > > > >
> > > > > >
> > Radu's comment: The problem exist only
> > if
> >
> > the
> > > > > > > > workmen
> >
> > > > > > decides to save the depreciation as he
>
> > > > > recuperates
> > > > > > > >
it.
> > > > > > > >
> > > > > >
>
> > > > > >
> > > > >
> >
> >
> > >
> >
>
----------------------------------------------------------
> > >
> > > > > But just when did they 'pay out' the
> >
> > > > 'depreciation'
> > > > > > > >
that they're going to
> > > > > > > > 'recuperate' it
from? They never did.
> > They
> > > > > >
> > 'allocated' a charge for
> > > > > > > >
depreciation on their books, and
> > expensed a
> > > >
> > portion
> > > > > > > > of that charge into
the
> > > > > > > > price of every pair of
shoes. But no
> > money
> > > > was
> >
> > > > > > 'paid out' to anyone. For
> > >
> > > > > them to succeed in their business,
> >
either
> > > > > > someone
> > > > > >
> > else must fail in theirs;
> > > > > > > >
or there must be a fresh sum of money
> > > > injected
>
> > > > > into
> > > > > > > > the
economy as a whole
> > > > > > > > someplace by way
of loans, creating
> > another
> > > > > > >
> debt-charge against future
> > > > > > > >
production; or we need the accounting
> > > > > >
corrections
> > > > > > > > Douglas proposed.
>
> > > > > > >
> > > > > > > >
Joe
> > > > > > > >
> > > > > >
> >
> > > > > > > >
> > > > >
> >
> > > > > >
> > > > >
>
> > >
> > >
> >
>
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> > > > > > > >
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> > >
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> > > > > >
>
> > > > > > >
> > > > > > >
=====
> > > > > > > Sincerely yours,
> > >
> > > >
> > > > > > > Radu Seserman
>
> > > > > >
> > > > > > > "You must be
the change you wish to see in
> > the
> > > > > >
world." Gandhi
> > > > > > > "Life is meant to be
fun!"
> > > > > > >
> > > > > >
>
> > > > > > >
> > > > > > >
__________________________________
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> >
> > > =====
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> >
> > >
> > > > > Radu Seserman
> > > >
>
> > > > > "You must be the change you wish to see in
the
> > > > world." Gandhi
> > > > >
"Life is meant to be fun!"
> > > > >
> > > >
>
> > > > >
> > > > >
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> >
> =====
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> > >
> >
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> > >
> > > "You must be the change
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> > >
> > >
> > >
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