Me:  Yes, the money system is digital in nature which means that money, whether it is issued as debt or as a gift is able to liquidate prices. Social Credit does not destroy the system simply integrates monetary gifting into it via a universal dividend and reciprocally to both the individual and businesses at point of retail sale.

GM:  Maybe.  Imputing intentionality is somewhat problematic.  “Finance” is not a monolith, and it does not act with the monopolistic intent o, for example, Microsoft squelching competitors and potential competitors, as it was convicted of doing with its Explorer browser.  Most bankers simply look to maximize their personal gains in the very short term, and have strong incentives to do so.  Too many such incentives, and there is one reason why Wells Fargo is now  in dutch with Elizabeth Warren.  So the idea of “Finance” trying to deliberately protect a long term monopoly runs rather counter to what we have learned about how the financial markets work.  Institutions often do what is contrary to their long term interest in order to maximize short term gains.  That astonished Alan Greenspan, who thought the markets were rational until the GFC showed him how banks had destroyed themselves by irrationally chasing short term gains instead of protecting their long term prospects.  See this New Yorker piece (http://www.newyorker.com/business/currency/elizabeth-warren-and-the-wells-fargo-scam)  on Senator Elizabeth Warren grilling the Wells Fargo CEO over the latest frauds there.

Me: While the individual banker/loan officer is not a co-conspirator there is actually a lot of evidence for conscious efforts on the part of the major too big to fail banks to make sure that politicians and governments tow the line of Finance’s interests, for instance all of the revolving door of former banking executives becoming secretaries of the treasury and other strategic governmental positions. And even if one doesn’t want to confront these facts the truth is the system is set up to empower the Banking system anyway. For instance, while the Banks don’t own a complete monopoly on credit creation….97% of it is a virtual monopoly. That plus their claim to ownership of the credit they create reinforces their power. And that’s not even considering their dominating paradigms of loan only and for production only that put a straight jacket on the types of vehicles allowed for the distribution of credit…..when what specifically is required to balance the system is monetary grace as in gifting.

GM:  YES, money is digital.  So what?  If the accounting system exists, what is the Social Credit of the USA now, and how much dividend could the recipients expect, for example, this year, if SC were in place?  How is Social Credit measured in that accounting system you aver to exist, and how distributed?If there is a reliable accounting system to calculate the dividend, it should be rather simple for a mathematician or econometricianto produce an algorhithm  that would calculate in near-real-time.  Then we could put up an online tool something like the “Debt Clock”  telling people”This is what you would have today with Social Credit– now write your Congressman and tell her/him you want to claim your dividend.”
Thanks again,

Me:  I thought Wally mentioned already that an assessment of the nation’s capital value would be part of the process of sizing up a dividend. Douglas said that attempting to balance the books of an economy was flawed  because it assumes that we depreciate/destroy our capital at the same rate that we create it. Some may disagree here, but it is my opinion that the dividend should be relatively abundant approaching a middle class living standard and the retail discount percentage significantly higher than any rate of inflation. This would reverse the individually austere and cost inflationary nature of the economy into an individually abundant and systemically cost deflationary one. One of the aspects of the philosophical concept of grace, upon which Social Credit is based, is abundant/abundance. A mere statistical equilibrium IMO is actually an orthodoxy to overcome. Therefore, the dividend and discount, so long as they reflected abundance and avoided stimulating profligacy, could be “ball park” estimates. If the dividend approached a middle class level, say $1500/mo. and the discount 40% that could translate into as much as $2100/mo in purchasing power for an individual and $4200 for a household, and any pay from employment would be additional. This would also enable taxes paid by both individuals and businesses for unemployment insurance, welfare and eventually even Social Security to be eliminated due to their then redundancy.

JS:  Actually, I see what Greg is getting at here.  I think in order to “sell” Social Credit, there has to be a multi-pronged approach.  Those of us on this list tend to be intellectuals and academics, so we tend to want to appeal to that group.  I think what Greg is saying is that this method is not going to appeal to the average person.  William Aberhart won an election guaranteeing a $25/month dividend.  I’m not sure if Greg knows this, but William Aberhart and the Social Credit party were elected to power in Alberta with the promise to implement Douglas Social Credit.

Me:  Yes I see the value of having an integrated approach where both altruism and self interest can be communicated to awaken the general population and the business community to the economic necessity and the ethical difference that Social Credit’s policies would effect.

Me:  Well I think that is a misconception as the dividend and discount are available to all. It is however true that ignoring or discounting an unhealthy/unwholistic viewpoint when a healthy and holistic one is available…is Wisdom.

GM:  Nobly put. However, ambassador Adlai Stevenson II said it most succinctly, and I have quoted him in earlier correspondence: “Unfortunately, Mdm., we need a majority.”

Me:  Okay. But I would simply say that selling faith and hope for the future with monetary Grace is a more effective way to overcome cynicism and scepticism. We even saw/see it in both Obama’s and Trump’s political strategies. All you really have to do differently….is make the policies reflect the philosophy and follow through.

JS:  We do need a majority, but we don’t necessarily need to convince the majority of people.  As Soren Kierkegaard once wrote:

“Truth always rests with the minority, and the minority is always stronger than the majority, because the minority is generally formed by those who really have an opinion, while the strength of a majority is illusory, formed by the gangs who have no opinion — and who, therefore, in the next instant (when it is evident that the minority is the stronger) assume its opinion..”

Me:  That makes perfect sense to me and dovetails with recent sociological research that indicates that if as little as 10-12% of a populace gets the idea that a change is necessary it becomes difficult to keep such change from being implemented. A committed 10-12% will sway the remainder who will then enthusiastically embrace the change or even merely glom onto it.

GM:  I suppose that the judgment of the best way to win an electorate is best made by competent professional politicians who know how to win. I know that in order to interest an editor in the subject of Social Credit, I would have to point to something in reality that made it now especially worthy of attention from the readers of that particular magazine or newspaper. If I were to talk only about Grace and Giftedness, I would expect a deaf ear, even from most “Christian” publishers. “Grace” is not, I confess, immediately apparent to me in the Trump campaign, as you seem to suggest. In fact, you are right that Pres. Obama did earn his title by promising somewhat vague “hope”, with the slogan “yes, we can!”, but has disappointed and even alienated many of the idealists who supported him. Guantánamo is still operating, for example, and disappointment among African American voters is threatening Democratic prospects in this election, see http://www.mcclatchydc.com/news/politics-government/election/article24775147.html.  “Fool me once, shame on you, fool me twice, shame on me,” rather well captures the attitude among many voters.

Me:   Actually I don’t think Trump is “selling” Grace either. If he were aware of Social Credit’s philosophy and policies he would be doing so. He IS selling change, a kind of change that you correctly point out was not followed through with by Obama. Again, what is needed is the economic and monetary philosophy and policies of Grace. Social Crediters are not talking “only about Grace and Giftedness” they are talking about integrating both a philosophy of Grace and the direct, pinpointed and valid economic policies that will resolve the deepest problems of modern economies.

GM:  If banks were indeed the ultimate source of all credit, as you seem to be suggesting,  they would certainly not be so worried about “dis-intermediation” as they have been since the 1970s. The Eurodollar market probably put the first and biggest nail into the coffin of bank intermediation, as companies found it economical to raise funds in the European capital market instead of from US banks that were subject to regulation that make credit costlier. Disintermediation is just a fancy term for “cutting out the middleman”. Banks are middlemen, a.k.a. “on lenders” in so far as they “get” funds from corporate and consumer depositors and, after reserving a fraction at the central bank, lend funds to borrowers.   Therefore their role and function is not distinct from other major institutional investors in that respect. As far as the ultimate source of monies going to borrowers by means of the junk-bond market, banks were not it. There is a lot on the record about those investors. The most important institutional investor group is, it is fair to say, pension funds, the like of Calpers, TIAA-CREF, etc. Banks can only wish they were as important as Social Creditors seem to think. They aren’t, and lending is no longer their main business.  Obsessing over the power of banks now seems something like obsessing over the power of the Luftwaffe. That also may have made great sense during the 1930s, as Mr. Churchill insisted at the time.

Me:  No one here “obsesses” over the  power of Banks. They do correctly look at and point out that a handful of too big to fail banks dominate the system and also correctly point at policies that would end that domination so that Finance would take its proper, non-dominating and so ethically correct place in the economy along with all of the other business models.

 GM:  However, the growth of shadow banking has made it difficult for policymakers to use the old tactics based on the idea that by influencing bank money creation using such tactics as adjustment of the reserve requirement they can control the money supply. People and institutions have somewhere else to go beside banks: the shadow banks.

Me:  The big Banks facilitated the growth of shadow banking largely by their promotion and selling of derivatives like MBS (mortgage backed securities) CDS (credit default swaps) etc. etc. And they now hold many times the entire world economy’s actual money volume with these same “weapons of financial mass destruction” and so attempt to extort things like bail outs and bail ins. Ellen Brown who is a member of this group has written extensively about this as well as Mary Fricker of REPO Watch.  The problem is still the business model of Finance, and the solution is still a new paradigm of monetary and price grace.

GM:  Jim, you may not have noticed that what you think I wrote came directly from the Fed.  It is counterfactual or at best hyperbolic to say, as you did, that, “This is totally untrue.  Savings has NOTHING to do with deposits.”  The source you cite, by contrast, says that saving by itself does not increase deposits and lendable funds.  So there are other sources too, but saving assuredly has something to do with deposits and lending

Me:   “saving assuredly has something to do with deposits and lending”

GM:  However, it would be equally foolish to dismiss all  research without examination, if only because, in order to determine whether the research is “flawed,” we need first to consider it in order to determine whether and how fatally it may be so.

Me:  What we really need to do is compare their research and policies (if they offer them up) to Social Credit’s research and policies. That will be basically the difference between flawed and incomplete research and honest accounting, valid economic theory and philosophical and ethical depth. But don’t just take my word for it. If you want a non-social credit source Steve Keen has done a lot of excellent de-bunking of the current monetary and economic orthodoxies you mention. But once one realizes most of the current thinking is wrong they need to actually consider Social Credit. Keen has actually re-discovered some of the things Douglas advocated like the basic, inherent disequilibrium of  modern economies.

JS:  You have this archaic notion that banks are intermediaries between “savers” and “investors”.  This idea has been totally debunked.

Me:  Precisely. What matters is the flow of total costs and hence even the minimal flow of total prices (there’s always a tendency and temptation to increase prices in a profit making system) will always tend to exceed the flow of total individual incomes even ideally available to liquidate those prices. This disequilibrated ratio of costs/prices to individual incomes necessitates continual borrowing in order to attempt to stabilize the system. However, because this is the ongoing and inherent state of the system injecting money into the system simply re-initiates the inherent problem. Direct and costless gifts of income to the individual/purchasing power at retail sale are therefore the best and only ways to actually bring equilibrium to the system, and I would say, because time never stands still and nature abhors a stasis, that in order for the system to truly be free flowing a “higher disequilibrium” producing more and more freedom, leisure and independence from Finance should actually be the objective of Social Credit policy. Time is a flow of moments, two of the major aspects of Grace are abundance and flow, Grace is love in action so Grace can only take place in the temporal universe and once again Time never stands still.  A philosophy and the policies of Grace are dynamic and abundant flows.

**********************************************

GM:  Yes.  Would inflation not rise also under SC, with much more purchasing power chasing a fixed supply of goods?  It is important to have some idea of what that dividend would amount to.Would it approximate the average or median wage?  That is more than $50k in the US, so if people making nothing now or even  less than that get topped up by the dividend, but production has not increased, what happens?  The marginal propensity to consume is higher among the lower income people.. So their money would chase goods. And there are millions of them.The central banks have been boosting the money supply through QE but inflation has not risen.

Me:You need to understand that the retail discount mechanism is a macro-economic/general one. With it, prices would fall both because of increasing productivity and also because if it was conservatively only say 20% and effected every month, even if we then magically had “normal” 2% inflation it would be dwarfed by the discount.  QE is actually just an asset swap not an increase in money/incomes, particularly an increase in individual incomes.

GM:  I need to understand how big that dividend would be and how calculated. Without that info we are weaving the wind.

Thanks.  With some quantitative info, maybe we can enlist some doctoral candidate to test this in a dissertation.  Yes of course 2% <20%.
Thanks,

Me:  Okay. I think there are ways to estimate/approximate it that are legitimate even without hard and fast statistics. After all it was Mark Twain who said there were lies, damned lies and then there were statistics. What about estimating a portion of the unnecessary and superfluous costs of our bloated defense budget or the tax costs for individuals and businesses to support welfare, unemployment and even social security that would become redundant and be replaced with a sufficient dividend. If both of these income generating parts of our economy were eliminated the true insufficiency of individual incomes would become much more apparent.

GM:  This could be the time for SC to get a hearing.

Me:  While it’s a noble effort trying to convince experts in finance, politics and economics I would suggest that a mass movement directly addressing both the general public and the small to medium sized business community detailing the personal and business benefits of a dividend and a retail discount, in other words more money instantly in your hand, more money to buy the businessman’s products and services and compensated lower prices as well. A sufficient dividend and discount percentage would appeal to both the left and right because it would enable both governmental downsizing and increased individual income. If the large constituencies of the small to medium business community….and the individual, that is everybody awakened to both their own self interests and the freedom it would bring to the system….how could the politicians not glom onto it, the financiers resist it and economists argue against it?

GM:  Where is the ‘mass movement”?  Who said that a committed minority is enough?

Me:  Yes, it’s obviously “waiting to happen”, but I intend to include a chapter about the policies of Social Credit as fitting perfectly into the formula in my book called The Cosmic Code of Wisdom and Grace as well as a call for Operation Economic Wisdom and Grace as I outlined above.

GM:  It has been. a long wait since the 1930s.  Is its real name Godot?

Me:  Beckett was a great artist, but unfortunately he worked the opposite side of the existential street. I prefer to stride the fully integrated side espousing faith, hope and love, in other words Gracientialism.

GM:  What effects? The failure in Alberta?  The failure in the US?  in both cases, SC was aborted before delivery.  Where has SC actually been implemented and then to what effect? A Social Credit government, once elected, failed to implemented the promised policies.  In the United States, legislation introduced by Congressman Alan T Goldsborough of Maryland would have set up a social credit regime (program, economy choose whichever word you please) in the United States. It passed the lower house with overwhelming support but failed in the Senate, according to one account because it was not possible to explain it clearly to the Senators.

Me:  I asked you to actually look at the actual effects that implementing Social Credit policies….would actually have. You’re not doing that. Instead you’re asking us to give you effects….which have never been allowed to happened, and then unfairly and incorrectly judging Social Credit as failed.  Look at that. You are either looking for an invalidation of Social Credit or your being (unconsciously) caught up in the obsessive dualistic habit of what modernity falsely thinks is objectivity which can result in a lot of heat but no light….unless an integration of the truths etc. of the opposing sides of the dualism occurs. As the process of Wisdom is the integration of truth(s) and the pinnacle result of such continual integration is a third more unified and graceful state/condition of workability, applicability and ethics….I suggest you actually look and integrate.

GM:Wallace, here is an intriguing essay:  http://www.alor.org/Triumph%20of%20The%20Past/DouglasandtheJews.htm

GM:  Note that George Will is not offering an encomium to leisure in that article, but pointing to very negative consequences of choosing not to work. To the extent that Social Credit offers people unearned income, this article would enter a debate as evidence against Social Credit.

OH:  On the contrary, I see it as strong evidence in favour of Social Credit. All these men are not working (regardless of the explanation and I do doubt the one he gives – I think the jobs just aren’t there anymore) and yet we still manage to produce everything we need to support these “idle men” and everybody else … fancy that.

Me:Correct Oliver. And what George Will misses because his conservative theoretical mind is fixed on employment as an only option to solving the problem are two additional things:

GM:   You asked me to look at the effects of social credit. I asked you to show them to me, which you cannot do. In fact, until Social Credit is implemented somewhere, we cannot “look at” the effects we can only “speculate about” the “possible” effects.  Looking at real effects is grasping reality. Speculating about possible effects is not.

Me:   Not correct. I asked you to look at the ACTUAL effects of what the dividend and discount would do.  Look at what a dividend distributed monthly would do. It would increase the scarce incomes of every citizen 18 and over without incurring an additional cost to the system. Look at what  a general discount to prices at retail sale would do, especially if it was 40% or more. It would eliminate and even reverse inflation which under “normal” conditions is 2-3% and it would also prevent price gauging above that rate from being a problem as well as endanger any business that chronically inflated their prices unnecessarily.   The truly beautiful thing about the dividend and discount are that they are gracious and yet “offers that businesses and individuals…cannot refuse/resist.”

There’s nothing wrong with using your imagination Greg. Especially if it helps you look at facts. And if it helped you perceive and understand facts that would solve the systemic economic effects that are largely responsible for dragging us closer and closer toward war in an era of modern weaponry…..I don’t think it would kill you to try doing so.

 GM:  Well, he does refer to unemployment as a “catastrophe” and refers to statistics showing that unemployment used to be much lower as “Those statistics were created before government policy and social attitudes made it possible to be economically inactive.” With more than a hint of disapproval for the fact that these people are now not working, and ” the loss of meaning, self-esteem and masculinity that is a consequence of chosen and protracted idleness.

Me:  His thinking is entirely orthodox and puritanical. The solution is leisure, i.e SELF determined purpose NOT JUST EMPLOYMENT…..and certainly not idleness. Requiring employment to be the solution will inevitably result in an unworkable and oppressive work state, especially as artificial intelligence and other innovations competitively and within another 10-15 years eliminate the need for human input/employment.   Economists and investigators miss this….because they simply are unable to ‘think outside of the box” or refuse to visualize the ACTUAL effects of policy.