| Subject: | RE: [socialcredit] Re: Why jobs disappear | | Date: | Tuesday, June 2, 2009 23:07:27 (+0000) | | From: | John G Rawson <johngrawson @.......com>
|
| In reply to: | Message 6788 (written by william_b_ryan) |
Hi Bill.
In NZ we believe that money should be cost- (interest-) free AT ISSUE, except for the minor costs of the equipment necessary to carry out the process..
We have nothing against banks getting a fair return for lending it to industry. They provide an excellent service in doing this.
At present, of course, they get it "cost free" because they have the right to manufacture it.
Regards.
John R.
> Date: Tue, 2 Jun 2009 07:52:39 -0700
> From: william_b_ryan@yahoo.com
> To: socialcredit@elistas.com
> Subject: [socialcredit] Re: Why jobs disappear
>
>
> "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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