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Subject:[socialcredit] Re: Why jobs disappear
Date:Tuesday, June 2, 2009  07:52:39 (-0700)
From:william_b_ryan <william_b_ryan @.....com>

 
"To cover expenses, including interest payments, each of the businessmen has to
sell products for at least $2,200,000. We assume that the lender buys products
and services and pays taxes for a total of $500,000, which thus is funneled in to
the economy." 
-------------------------------------------------------- 
--------------------------------------------------------- 
 
You are assuming that the businessmen are obligated to pay interest in the
amount of $2,000,000, but the lenders are spending into circulation only
$500,000.  You could just as easily assume that the lenders are spending
$2,500,000, which would be more than enough for the businessmen to pay interest
for the financial services they are receiving from the lenders.  Why don't you do
that?  Especially since that is what generally is happening in the real world. 
You must make your hypothetical example relevant to the world as it actually
exists.   
 
In a normally expanding economy, businessmen are spending more, at any given
moment, than what they are simultaneously receiving over their retail counters. 
Yet they are recording a profit according to the rules and conventions of double
entry accounting.  The economy is expanding and wealth is increasing throughout
the community.  Transaction balances are accumulating and not depleting. 
- 
 
"It is therefore very important to think in new terms - we have to change to an
interest free economy."  
-------------------------------------------------------- 
--------------------------------------------------------- 
 
This is not possible if we are to have a market economy.  In a market economy
the costs of production for goods and services, including financial services, are
allocated to the recipients of the goods and services, in proportion to the
quantity of goods and services being received.  Profit and loss means responding
to the will of the consumers.  And there are real costs to supplying financial
services, in bricks and mortar, salaries, wages, and dividends to the lenders'
stockholders. 
 
The most pre-eminent "interest free" economy that has ever existed was that of
the old Soviet Union. 
 
And it was an economy that was directed through bureaucratic fiat, rather than a
decentralized management responding to profit and loss in free markets. 
 
But that bureaucratic fiat was informed by pricing, product and manufacturing
information, gathered from the market economies through espionage, that was fed
into their Leontiefian style input-output tables.  Only through this process was
the Soviet system able to emulate the productivity of the market economies with
any degree of efficiency.  From this process orders were dispatched to collective
farm A to deliver so many bushel baskets of tomatoes, and factory B to deliver so
many tractors. 
 
 
--------------------original message--------------------- 
[socialcredit] Why jobs disappear 
Monday, June 1, 2009 5:10 PM 
From: "Per Almgren" <almgren_per@telia.com> 
To: socialcredit@elistas.com 
This is why jobs disappear! 
 
Imagine that you pick out a group of eleven people from society. Ten of these
are businessmen who themselves, or together with others, work to produce a
variety of products, each one within their specialized area. The eleventh is a
person lending money to the others. 
 
The money lender charges 10% interest (to simplify the calculations) on the
money he lends. All businessmen borrow $2,000,000 each to cover expenses for
purchase of raw materials, wages to employees, plus their own living expenses for
one year. The whole amount of the loans is then used to buy from the economy,
which in principle consists of all other businesses, people and institutions,
including the sector financed by taxes. The economy has received a sum of
$20,000,000. 
 
To cover expenses, including interest payments, each of the businessmen has to
sell products for at least $2,200,000. We assume that the lender buys products
and services and pays taxes for a total of $500,000, which thus is funneled in to
the economy. The market can then as a whole buy products and services from the
mentioned group of businessmen for $20,500,000. But since each businessman has to
sell $2,200,000 worth of goods, as a group they have to sell $22,000,000 worth.
One or more of the businessmen will therefore not be able to sell products at the
required level if the rest of the economy doesn’t increase its debt by
$1,500,000. At least one or more of the business owners have to file for
bankruptcy or, if the lender agrees to it, borrow another $1,500,000. 
 
The companies faced with the threat of bankruptcy have to fire employees and/or
loose the collateral for the loans. This will be repeated year after year and
more and more businessmen loose out, since all other groups in society will be
affected by the same economical principal. It is the lenders, who already have
more money than they need, who create a growing debt as soon as they do not buy
products and services or pay taxes on their income from interest payments for the
total amount earned. 
 
It is therefore very important to think in new terms – we have to change to an
interest free economy. This would benefit the largest group of the people while
the existing system only benefits a small percentage of the population. 
 
Per Almgren 
 
From borrowers’ purchases 20,000,000 
 
_From lender’s purchases 500,000_ 
 
To the economy 20,500,000 
 
Purchases from the economy 20,500,000 
 
Interest on loans -2,000,000 
 
_Payments on loans -20,000,000_ 
 
Borrowers’ deficit -1,500,000 



       

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