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Dear Alan,
The situation is a complete dog's
breakfast.
1. a) It would be
helpful if, for once, Stephen Zarlenga and Richard
Cooke (and, yes please,
other members of this list) state specifically
whether they do, or do not,
agree with national bank-issued interest-free
loans (administered by the
banking system which may make an administration
charge) for:--
a.. public capital projects -- bridges, sewage works, hospitals
b.. environmental capital projects (including clean electricity
generation)
c.. micro-credit
d.. student loans
e.. medium and large businesses (IF thereby wider ownership is furthered
and
productive capacity spread)
f.. small business/farms
g..
homes (when banking system not able to create money and, say, 80%
loans
NB All such loans are repayable and cancellable. The issuance
is for the
purposes of developing and spreading productive (and the
associated
purchasing) capacity so as to achieve a Say's Theorem balance of
supply and
demand and also forwarding social and economic
justice.
b) They might then like to state specifically
if they agree with
debt-free issuance, (roughly) to what amounts, for what
purposes and in what
circumstances (e.g. restriction of banking system
ability to create money).
c) They might then further
wish to say specifically whether the AMI
Monetary Act does, or does not,
contain a National Dividend (defined as a
reasonable basic income).
Bill Ryan is right -- it doesn't.
It is about time that both Stephen and
Richard clearly said where they stand
and did not hide behind general
phrases like "we must spend and lend" which
phrases have no meaning until
given specificity and, in any case, allow
enemies of monetary reform
to claim that large-scale inflationary funny
money is being
proposed.
I would like to add that I greatly admire Richard's spirited
analyses of the
overall situation and his understanding of the corrosive
effects of interest
but, being opposed to interest, should result in
understanding of
interest-free loans yet, in his case, this does not
appear to be the case
(I could be wrong).
2. Bill can quote
Calvin to his heart's content but the real issue is
whether interest is
necessary when the issuance is for the purposes of
developing and spreading
productive (and the associated purchasing) capacity
so as to achieve a Say's
Theorem balance of supply and demand and also
forwarding social and economic
justice. In these circumstances, interest is
not necessary because the
money comes from the national bank (and is
administered by the banking
system which may make an administration charge).
There is no objection to
Bill and his colleagues (and the banks) lending
their own money and charging
interest -- they have the money and if you want
it you will have to pay
their demand. BUT that is a completely different
matter from the
supply emanating from the national bank for the
above-mentioned
purposes.
Rodney Shakespeare.
----- Original Message -----
Sent: Wednesday, September 03, 2008 3:46
PM
Subject: Re: [socialcredit] Richard C.
Cook: Monetary Crank
I ran across Zarlenga a number of months ago and was impressed with his
vehement rejection of Social Credit principles. My guess is that Richard
Cook's involvement with Zarlenga is kind of an uneasy dance that involves
compromise and reduction of principles to almost the least common
denominator.
With that in mind I can see why Richard Cook might promote something that
isn't 100 percent what he wants but comes the closest to addressing the issues
he is concerned with, even if he is only getting 50 percent of what he really
wants as an advocate of Social Credit.
Regards
Alan
In a message dated 9/3/2008 9:31:23 A.M. Central Daylight Time,
johngrawson@hotmail.com writes:
You
appear to have missed a lot of Richard's material.
His policies are
identical with Douglas, including the "price discount" which I consider
unworkable, but with two exceptions: One the immediate cash payment to
consumers. We could not do that here, but I think perhaps your economy is so
strong and so depressed that it might be practicable and perhaps necesary.
The other is use of the nation's credit for infrastructure. I believe that
the debt structure has grown so much since Douglas' time that this is
absolutely necessary. It certainly worked here when our first NZ Labour
govt. was applying monetary reform principles.
I believe it is no
accident that deep thought over the years here by our movement
coincides almost exactly with that of a man of Cook's
stature.
He appears to have a more complete grasp of the situation than
Zarlenga.
Your term "crank" is very familiar here. It has
invariably come from orthodox opponents who dared not counter us with
reason.
John R.
> Date:
Tue, 2 Sep 2008 08:42:12 -0700
> From:
william_b_ryan@yahoo.com
> To: socialcredit@elistas.com
> CC:
rickycook21@hotmail.com; ami@taconic.net
> Subject: [socialcredit]
Richard C. Cook: Monetary Crank
>
> Appended below is Richard
Cook's recent Internet posting. It is a great disappointment to me in many
respects. Gone is even the pretense of Social Credit theory. It is heavily
influenced by Stephen Zarlenga, a Georgist who argues that Henry George was
a Greenbacker!
>
> The A + B theorem is replaced by the
fallacious "debt virus" theory that we have discussed previously. The
"usury" argument is an Islamic fundamentalist slam against modern informed
Christianity, which we have also discussed previously, so I'll just briefly
outline the arguments now.
>
> In Zarlenga's "American Monetary
Act" is a provision for a so-called "citizens' dividend." Says Cook: "The
Act also includes a provision for a citizens’ dividend, similar in some
respects to the Alaska Permanent Fund, which would inject desperately needed
purchasing power into the economy without additional government debt or
taxation."
>
> Lest anyone think that this "citizens' dividend"
is similar to the Social Credit proposal for a dividend, read this from the
act itself, as posted on Zarlenga's website:
>
> "SEC. 506
INITIAL MONETARY DIVIDEND TO CITIZENS Not later than 90 days from the
effective date of this section, the Secretary, in cooperation with the
Monetary Authority shall provide recommendations to Congress for payment of
a Citizens Dividend as a tax-free grant to all U.S. citizens residing in the
U.S. in order to provide liquidity to the banking system at the commencement
of this act, before governmental infrastructure expenditures have had a
chance to work into circulation."
>
> Please note that in
Zarlenga's plan the dividend is not continuing, as in Social Credit, but
paid only once at the beginning of the plan's implementation "before
governmental infrastructure expenditures have had a chance to work into
circulation."
>
> As to the "debt virus" argument, Cook quotes
Bob Blain:
>
> “Loans created only the principal. Interest had
to be paid out of principal. So payment of interest reduced the money supply
and slowed economic activity. Recovery could come only when new loans were
taken out at least equal to interest paid.”
>
> The second
sentence is simply a false statement of fact. Banks create customer deposits
not only through the principal of loans, but when they spend, through
reciprocal economic activity, salaries, wages, dividends and ordinary
business expenses into the community, which become available to pay interest
back to the banks.
>
> As to the religious argument, I have as
the authority John Calvin's letter of 1545, as related by Norman Jones of
Utah State University, that two quite different words in the Semitic
languages were inappropriately translated as "usury" into the European
languages.
>
http://www.geocities.com/new_economics/Calvin-usury.txt
>
>
This is supported in modern Islam.
>
http://www.geocities.com/new_economics/Quran-usury.txt
>
-------------------------------------------------------------
>
> FAIR_USE_CLAIMED
>
> Democrats in Denver Should Skip
One of Their Parties & Read the American Monetary Act
>
>
by Richard C. Cook
> Aug. 27, 2008
>
> How are things
going at the Democratic Party National Convention in Denver this
week?
>
> Are they talking about the fact that the Western
world is run by an international financial elite headquartered in London,
the financial capitals of mainland Europe (such as Frankfurt, Hamburg,
Amsterdam, Paris, and Milan), and, of course, New York City?
>
> Are they mentioning at their cocktail parties that the financial
elite exert control over the world’s population through the cartels that
make up the world’s producing economies and through the civilian and
military bureaucracies who work for the governments that kow-tow to
them?
>
> Of course they know that the most important cartels
are those which control energy resources. And that of these, the commodity
of central importance is oil. But is any of this helping them draw
conclusions regarding the doubling of oil prices during the last year or
about the largest oil company profits in history?
>
> Also,
they should be drawing the right conclusions from the fact that every
private and pubic enterprise operates on the basis of a money economy,
though it would be more accurate to call it a credit economy. This means
that whoever controls the issuance of money and credit controls the world.
And the world’s monetary systems function on the basis of money and credit
being introduced into circulation through loans from the banking system,
loans for which interest is charged. So what should that tell them?
>
> In fact, they should be pointing out to each other and their TV
viewers that the charging of interest for the use of money is a chain around
the neck of everyone on earth. Further, that these cumulative interest
charges are built into the price of every product that is manufactured or
consumed. And that growth of debt means price increases too.
>
> They should be honest in making it clear that the world is a
master-slave society, that the slaves are those who borrow and pay interest,
that the masters are those who collect the interest, and that this unjust
system has existed in one form or another for thousands of years.
>
> The candidates and delegates are talking about the aspirations of
the American people and how everyone should have an opportunity to achieve
their dreams. But if the United States were a free nation, they would also
be talking about a financial system that destroys people’s dreams.
>
> Unfortunately, the highest rung the candidates and delegates have
been able to reach on the ladder of modern-day slavery is the need for more
jobs—but they fail to note that jobs are not only the means by which people
live, but also the instruments for them to pay the heavy burden of interest
the masters of finance require.
>
> What they won’t say is that
the world economy is based on usury, something religions used to consider a
crime (and which Islam still does). Usury is the charging of interest for
the use of money. As the religions backed off from their prohibitions of
interest, usury became just excess interest. But that’s not what the word
really means.
>
> So what have over two centuries of usury done
to the United States?
>
> The best answer ever given to that
question was contained in a paper entitled “Revisiting U.S. Public and
Private Debt” published in January 2005 by Dr. Bob Blain, Emeritus Professor
of Sociology at Southern Illinois University. The paper updated an earlier
study by Dr. Blain published for the United Nations Educational, Scientific,
and Cultural Organization (UNESCO) in the International Social Science
Journal, November, 1987, Paris, pages 577-591.
>
> In his
paper, Dr. Blain examined the growth of total public and private debt in the
U.S. Total debt includes “the debts of governments (federal, state, and
local), corporations, farmers, home mortgages, and consumer, commercial, and
financial debts.”
>
> In his analysis, Dr. Blain began with
data from the Bureau of Economic Analyses of the United States Department of
Commerce which covered the years 1916-1976. After that year the Bureau
stopped publishing the data.
>
> The figures showed that from
1916-1976, total U.S. debt grew from $82 billion to $3,800 billion ($3.8
trillion). But most of that growth was during the last 21 years, from
1955-1976, when it began to grow exponentially. Dr. Blain wrote, “The
consistency of the pattern suggests that some imperative is at work,
something that requires debt to increase.”
>
> Dr. Blain found
the answer by researching American history. He wrote: “Then I read G.R.
Taylor’s 1950 book, Hamilton and the National Debt, which described the
debate over Alexander Hamilton’s plan to fund the new economy with borrowed
money.” He continued:
>
> “The most revealing account was a
speech by the first congressman from Georgia, James Jackson, on February 9,
1790, in which he predicted that adoption of Hamilton’s funding plan would
lead to the explosive growth of debt. Jackson said, ‘Though our present debt
be but a few millions, in the course of a single century it may be
multiplied to an extent we dare not think of.’” (Annals of Congress, Vol. I,
February 1790, pp. 1141-2)
>
> From the very beginning, the
U.S. had a monetary system based on borrowing and debt. First came the
thousands of state chartered banks that began operating late in the
Revolutionary War period and continued in one form or another until today.
Then there were the two early central banks: the First Bank of the United
States (1791-1811) and the Second Bank of the United States (1816-1836).
Today’s national banking system began during the Civil War with the National
Banking Acts of 1863-64. Then there is the system we are living under today,
the Federal Reserve, chartered by Congress in 1913. Even during the times
when the government has sold its debt directly to the public, as with war
bonds, savings bonds, and Treasury notes and bills, that too has been money
borrowed at interest.
>
> Although there have been times in
history when money entered into circulation other than through debt, such as
with coinage and the Civil War greenbacks, those were exceptions and today
are of little importance.
>
> Dr. Blain estimated that from the
time Alexander Hamilton placed the U.S. under a debt-based monetary system
until today, the debt has compounded at 5.8 percent annually. The big
problem with this system, he said, was “that no money was created to pay
interest.” He continued:
>
> “Loans created only the principal.
Interest had to be paid out of principal. So payment of interest reduced the
money supply and slowed economic activity. Recovery could come only when new
loans were taken out at least equal to interest paid.”
>
> Dr.
Blain concluded, “As long as the money supply of a nation is created as debt
costing interest, debt must grow by compound interest.” From a longer-range
view, it’s a system that is constantly collapsing and that must constantly
be bailed out.
>
> Dr. Blain next sought to update his figures
past the 1976 data from the Bureau of Economic Analyses. Turning to the
Federal Reserve’s series on “Total Credit Market Debt Outstanding,” he found
remarkably similar indicators.
>
> He found that adding data
from the Federal Reserve from 1945 to 2003 showed the “debt explosion”
continuing. In 1945 total debt was $463.4 billion. In 2003 it was $44,967.7
billion ($45.0 trillion). When he projected the debt level for 2010, he
arrived at a figure of $74.9 trillion. By this time the debt curve was
climbing so steeply there would be almost a doubling of the amount of total
debt in only nine years.
>
> It might be argued that these
figures do not take into account inflation. This is because lending at
interest is the cause of inflation. The dollars still have to be repaid with
interest. The problem occurs when economic growth, measured by GDP, does not
keep up.
>
> Looking at the growth of GDP from 1945 to 2003,
the increase was from $223.1 billion to $10,987.9 billion, a factor of 49.
But the debt ($463.4 billion vs. $44,967.7 billion) grew by a factor of 97,
almost twice the rate of GDP growth. Thus the total debt burden on the
economy has doubled from a ratio of 2:1 to more than 4:1 (though it was much
less than that during the early days of the nation).
>
> But
with continued compound growth of debt and a slow- or no-growth state of the
economy as we head into a recession, we are starting to see what Dr. Blain
called an “acceleration to meltdown.” He wrote:
>
> “We are
buying more and more in the same amount of time. Witness the efforts of
people to get rid of their excess through yard sales, storage units, and big
trash pickup days, and the massive size of what are euphemistically called
landfills. While two billion people in the world lack basics such as clean
water, food, and shelter, Americans throw away their microwave ovens,
televisions, computers, refrigerators, furniture, and cars. Meanwhile,
acceleration is applauded as increasing productivity. It’s like arguing that
cancer is good because it grows.”
>
> These are the things the
Democrats in Denver should be talking about, instead of going to so many
parties. They should be making note that the U.S., to quote economists close
to the Federal Reserve, is “functionally bankrupt.”
>
> In
fact, the debt this nation owes to the banks, to foreign creditors, and to
each other can never be paid off. Further, one big reason for all of our
fruitless military endeavors overseas may simply be to escape unpleasant
economic realities at home. But this is pointless. Nothing creates more debt
than war, as the bankers have always known.
>
> The only
solution is to adopt a monetary system that is not based on debt. Dr. Blain
makes a couple of specific recommendations: 1) “Stop using percentage rates
to calculate charges for the use of money”; and 2) “Congress must supply the
economy with a money base that is debt-free and interest-free.”
>
> The second point is a call for a new monetary system, not one based
solely on lending by the banks or on government borrowing. One organization
that has developed a blueprint for such a system is the American Monetary
Institute (AMI), headquartered in Chicago. The director of the AMI is
Stephen Zarlenga, author of a massive, groundbreaking work: The Lost Science
of Money (AMI, 2002). Zarlenga’s assistant is Jamie Walton, a monetary
reformer from New Zealand.
>
> AMI will be holding its fourth
annual conference in Chicago on September 25-28. Expected as keynote speaker
is Congressman Dennis Kucinich, whose wife Elizabeth once worked as an
intern at AMI. Dr. Bob Blain will be a featured speaker.
>
> On
the AMI website at www.monetary.org is a remarkable document, the American
Monetary Act [.pdf] The product of several years of work by Zarlenga and his
network, which now includes a number of local chapters around the country,
the American Monetary Act would replace today’s debt-based monetary system
with one where the government spends or loans money directly into
circulation.
>
> Under the Act, the Federal Reserve would be
retained as a national financial clearinghouse but would no longer be a bank
of issue. The system would be overseen by a Monetary Control Board within
the U.S. Treasury Department. The Act also includes a provision for a
citizens’ dividend, similar in some respects to the Alaska Permanent Fund,
which would inject desperately needed purchasing power into the economy
without additional government debt or taxation.
>
> Also
promoting a citizens’ dividend, by the way, is Stephen Shafarman in his
important new book, Peaceful, Positive Revolution. (Tendril Press,
2008)
>
> It’s the American Monetary Act the candidates and
delegates in Denver should skip one of their parties to read, because it’s
the only way any of their hopes for America can ever be realized. Says AMI’s
Jamie Walton:
>
> “This is a crucial time. Things are
happening. We have got some key media people talking and writing about our
kind of reforms. The inertia is starting to yield. Things are starting to
roll. The worsening conditions in 2009 will give us a once-in-a-lifetime
chance to be heard above the propaganda.”
> -
>
>
>
>
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