I Can End Every Politician’s Most Significant Economic Fallacy On Both Sides of The Aisle…

…with one little measly policy. That’s how absolutely transformational this policy is.

And you’re going to hear it right now.

For instance these two fallacies, one liberal, one conservative:

“Increasing the money supply will cause inflation.”

“Increasing the money supply won’t cause inflation.”

How can these statements both be false? Because increasing the money supply….isn’t the deepest reason why inflation occurs or doesn’t. Rather, the deepest and actual reason that inflation occurs is the human freedom to act in commercial firms. 

The only way to prevent inflation is to guarantee that deflation is of more benefit to both commercial and individual agents…than inflation. And as the only way to guarantee that…is to significantly reduce prices at the point of retail sale so that the consumer benefits from the additional purchasing power…and commercial agents benefit by the vastly increased volume of sales that the increased purchasing power will inevitably engender….that is why a rebated discount of significant percentage at retail sale is the keystone policy that breaks the spell of the current monopolistic financial paradigm of Debt Only…and is the very expression of the new monetary and economic paradigm, namely Direct and Reciprocal Monetary Gifting.

LA:  Exactly!  Changing the incentive to spend rather than hoard is very compelling.  The only reason to save is perception of eventual shortage.  Hence the need for the dividend.  When the ROI to buy that stereo I always wanted is better (e.g. 25% rebate right now) versus putting it in my BofA savings account (i.e. less than 1% a year) then gee wiz!  What do I do?  WHAT DO I DO?  I think I’ll buy the stereo!  Hence the need for the rebate.

Me:  Yes, they’re complementary policies and in sufficient amounts and percentages enable the best aspects of the left/right agendas to be realized which is a tremendous political selling point….at least in the minds of people who are truly mentally open to it as opposed to those who are so arrogantly partisan or working their own agenda that they refuse to look at it…so as to actually perceive it.

JR:  Very easily, Steve.   If the “gap” is fairly high, say 10%, that will leave  40% of GDP worth of loose money without corresponding value of goods to be purchased by it.  You are also leaving out the far more important aspect of a national dividend, which would be paid equally to all, not primarily to the rich.

More importantly, my aim always when corresponding here is to show that Social Credit is logical, that Douglas’ analysis is sound, and that some of the extravagant claims made in its name are not necessarily part of it.

We speak somewhat different languages and sometimes I approve of your flowery philosophy indicating the need for a complete change of underlying emphasis.  However, as a scientist I believe economics must develop a rational approach based on the same disciplined reasoning,  I believe it can gain this from basic S C principles.

Me:  John,

You’re not looking at the fact that monetary policy is directly tied to retail sale….where the normal price for a $100 item or items…is now and would always be under such a policy….only $50!!!!!!!!!!!!!!!!!!!!!! Look at the immediate and ongoing effect of the policy…..and forget about the quantity theory of money and its alleged cause of inflation. Forget about the need to “balance the budget” and the impossibility of General Equilibrium theory. The new monetary and economic paradigm of Direct and Reciprocal Gifting enables what I refer to as “the higher disequilibrium” and freedom from the monopolistic paradigm of DEBT ONLY.

I learned a tremendous amount from you and the other guys over on the Social Credit group. I also learned a lot from Steve Keen, Michael Hudson and also some from MMTers,….but none of them have apparently studied and understood the history and signatures of paradigm changes like I have and so, even though they may offer up policies that perfectly reflect the new paradigm, (Keen “a modern debt jubilee”, Keen “QE for the people” MMT a sovereign country’s money system can be directly distributive…..which MMTers haven’t actually recognized yet, that’s what I’ve recognized from what they say)…and even though they may look straight at it they are still largely unconscious of how powerful and transformational all new paradigms are in the body of knowledge/area of human endeavor they occur in.

Habit and orthodoxy are the killers of innovative thought and paradigm perception. Look. Look until you see, until you come fully into present time. There you will find millions of new experiences, how antiquated and unnecessarily complex and fallacious old paradigms have become and how elegant, simple and resolving new paradigms are.

JR:  Steve, I don’t get your allusion to Left and Right, which are united in opposition to monetary reform.  In fact, presently the socialists appear to be our strongest opponents because they see  reform as a method competing with their high taxation and centrally controlled policies. This goes right back to the Fabian socialists in the UK early last century.  (“Nothing wrong with Social Credit, but it’s NOT Socialism.”)

I presume you are aware of the very obvious corollary of Douglas’ analysis, that normally we suffer from cost push inflation as a result of costs in industry not associated with payout of wages etc.  From this,  two equally obvious conclusions:  1. That there is a “gap” to be surmounted before any infusion of new money can cause demand-pull inflation and  2. It explains why present economies can not thrive without growth; without  new money being regularly borrowed for new production.

Unless governments are borrowing and spending extra for non-consumables such as armaments, of course.

Either way, debt must grow, so probably the best way to guess the extent of the “gap” is to measure debt growth, less any inflation component, over time.

Me:  Wisdomics-Gracenomics being extensions of Social Credit policies accomplish the best aspects of the right/left agendas, i.e. more profitability for enterprise and much greater economic democracy. 

I want you to tell me how you’re going to have price inflation with a 50% reduction, whether as a rebated point of sale discount by the enterprise to the consumer or a rebate by the monetary authority back to the consumer????

Even if businesses before retail raise their prices 3-4% you’d still have 46-47% price deflation. They’d dare not raise them much more than that for fear their competition wouldn’t and they’d lose market share. You could also tax anyone who did raise their prices just to gain by 150% as I have suggested before (and encourage frugality on their part with a gift of 1% of their sales if they didn’t raise their prices or even lowered them more)

There are many other benefits for both business and individuals in abundant dividends and high percentage discounts I have enumerated here before like the end of payroll taxes for welfare, unemployment insurance and social security and the elimination of their respective bureaucracies…the end of poverty (a $1000/mo dividend and a 50% retail discount for a couple both working part time jobs that made them $20,000/yr equals $4000 x 12 = $48,000 plus $40,000 x 2 = another $80,000 = $128,000/yr ….the end of Finance’s domination with their paradigm of Debt ONLY and the end of the systemic necessity to continually borrow by the individual and by enterprise by Debt ONLY because they can have a guaranteed middle class lifestyle and also save without tanking the system with their savings (abundant dividend and retail discount policies resolve the macro-economic paradox of thrift) 

Just review my posts on the other threads….once you see through the paradigm of Debt ONLY and see the possibilities of the new monetary paradigm of Gifting it all falls in place and outside of the two basic policies all you have to do is strategically regulate/tax/encourage with Gifting.

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