Thread on Stephanie Kelton’s Substack Newsletter

Me: All of your suggestions are valid, but why not go to the heart of our economic problems and solve more than just inflation? We can do this by implementing a single policy that has instantaneous, universal and ongoing macro-economic effects. That policy is a 50% discount at retail sale, the entirety of which is rebated back to the retail merchant granting it to their customers by the FED or some other monetary authority. Not only will this immediately reverse all of the present inflation, but it will (amazingly) implement beneficial price and asset deflation into profit making economic systems. It will also immediately double everyone’s purchasing power and potentially double the demand for every enterprises goods and services so its integrative of the self intersts of the traditionally opposed economic constituency of consumer and enterprise.

I’m surprised that Modern MONETARY Theorists have not recognized such a policy and latched onto it because it ends inflation forever and hence shuts the mouth of every conservative/libertarian who says fiscal spending is inflationary. If you end any possibility of inflation that means you can fund every rational socio-economic and climate/ecological mega project…exactly like MMTers and others would like to see. What do you think Stephanie?

Me: Any response? A critique even. Happy to respond either way. All I’m interested in is the resolution of economic, social and political problems. Money DOES make the economic world go ’round, and Direct and Reciprocal Monetary Gifting will finally enable us to right things economically and accomplish the general Good.

GM: So everyone just doubles their prices.

And money doesn’t make the world go round. Production does!

Me: “So everyone just doubles their prices.”

No, that is the typical response by someone who thinks they know what free markets are. Free market theorists have confused the chaos of alternately goosed and strangled financial dominance by the current monetary paradigm of Debt Only with freedom. What you want is economic free flowingness and that is exactly what doubling everyone’s purchasing power and hence demand for every enterprise’s goods and services. In the temporal universe that we all live in there is only freedom amongst known and enforced barriers. That’s being honest and real. Free market theorists make a fetish out of freedom that accomplishes nothing but distracting people from the real economic problem, namely the monopolistic monetary paradigm of Debt Only that the private banks wield to dominate everyone.

In my book in order for retailers to opt into the 50% Discount/Rebate privilege they must submit their books to forensic accounting analysis that shows they have not incurred additional costs. Their costs will be massively decreased by massive cuts in payroll, personal and corporate taxes enabled by the new paradigm so there is virtually no possibility of them incurring additional costs from before the new paradigm. Also, any business model/enterprise prior to retail sale who arbitrarily raises their prices will be taxed at a rate of 100% on any revenue they may have garnered from such inflation. If any retailer becomes a serial inflater they will lose their 50% Discount/Rebate privileges and any prior enterprise to retail sale who is a serial inflater will lose their payroll, personal and corporate tax cuts. No retailer can resist opting into the new 50% discount/rebate policy because even the stupidest consumer is not going to pay 100% of the price of everything when they can walk next door and only pay 50%. Such extortion is totally justified by the general good the new monetary paradigm bequeaths to every economic agent individual and commercial. That’s what sovereign and ethically redeemed control looks like.

What enables production? That’s right…money. And the new monetary paradigm and its philosophically aligned policies will enable us to wake up and die right in so many ways.

GM: You wrote a book?????

Everyone in a free-market economy is just going to happily open up their books to hard audits by the authorities???

Resources enable production. Money enables exchange. And Venezuelan Bolivars paper streets.

Me: “Everyone in a free-market economy is just going to happily open up their books to hard audits by the authorities???”

Yes, if they want to participate in a policy that will double the amount of purchasing power for their products and services…and consequently if they want to survive because as I said what consumer is going to pay them 100% of their price when they can get the same amount of consumption for 50% of it…from their competitor. And of course when the can also get like a 75% cut in their personal and corporate taxes by playing by the new gracious rules…you don’t think thats enough incentive to turn even the socio-pathic CEO into a balanced actor??? Even socio-paths can compute and understand survival.

Historically paradigm changes are marked by conceptual opposition as in Debt Only to Monetary Gifting and geo-centrism to helio-centrism. They are also marked by complete inversion of temporal universe reality as in geo-centrism to helio-centrism and Debt Only to debt and Monetary Gifting. Same with nomadic hunting and gathering to agriculture, homesteading and urbanization. My policy program for the new monetary paradigm accomplishes every one of the classic signatures of historical paradigm changes. In fact it accomplishes the signatures of only the two mega-paradigm changes that humanity has evolved through.

GM: Well that is some free market!! The Commies would love it.

And who tames the psychopaths in government?

Me: The new monetary paradigm has nothing whatsoever to do with communism. In fact it not only leads to a rational form of industrial capitalism it goes a long way toward ending the bitch that right wingers always throw at progressives, namely excessive re-distributive taxation.

It’s better than the delusion of free markets. It’s abundant economic free flowingness.

“And who tames the psychopaths in government?”

A mass movement that communicates the universal benefits of the new monetary paradigm’s policy program will herd the entirety of the political apparatus toward economic, social and ecological sanity. That’s who. That’s how Ghandi, MLK, Jr and others have made such progress. The trick is to keep the analysis on the paradigmatic level instead of settling for the theoretically complex but palliative reform level. Theoretical analysis is all well and good of course, but the key to perceiving and implementing a new paradigm is actually not complexity, but simplicity. Why is this? Because paradigms are always SINGLE concepts. Single concepts that describe the operant factor(s) of a present or new paradigm. Analyze and isolate the operant factor of a system or area of human endeavor that has many problems that have grown up around it, utilize integrative, synthesizing thinking (the very process of garnering wisdom itself) and if you’re perseverant and a little lucky you might discover the right concept, way and place to implement the new paradigm. A new paradigm usually occurs after the discovery of a new tool and/or insight. Like the telescope and the discovery of the ellipse like with the Copernican cosmological paradigm change. In the present case it’s the discovery of the universal, macro-economic significance of the point of retail sale…which has escaped recognition by virtually all economists because they are so into complexity, analyzing problems instead of solutions and because they are so distracted by abstraction that they have failed to look directly at the economic process and its terminal ending point at retail sale…which has the above macro-economic effects with a policy that is the exact expression of the new paradigm. Again, I’m not knocking less integrative forms of analysis. The fact is all of the leading reform movements like Keen’s financial instability hypothesis, Hudson’s financial parasitism, UBI, Public Banking and Modern MONETARY Theory all align philosophically with the new monetary paradigm concept…it’s just that they haven’t cognited on the exact concept of the new paradigm and found how, where and when to most efficaciously implement it.

GM: And where has your plan been implemented, assuming the requisite herd has convinced a government somewhere of its sage thinking.

MLK’s ideas have not had much success and Ghandi exchanged one tyranny for another as well as Partition.

I have no idea how a retailer shall willingly give up 50% of his revenue, even assuming that his markup is 100% of his cost. And this army of auditors should operate as cleanlyand efficiently as the IRS?

Me: This is a paradigm change. If it had been implemented somewhere you definitely would have heard about it.

Retailers do not give up a single cent of their revenue as the monetary authority rebates the entirety of the discount they give to consumers…back to the retailer. An army of forensic accountants as thorough and as ethically inclined as Bill Black’s group could only be a sanctifiying way of keeping the new UNIVERSALLY beneficial paradigm from being gamed by those who have habitually done so under the old paradigm. I’m sorry, you really should work on your cynicism. It’s a good purgative, but a poor lifestyle.

Again, paradigms/paradigm concepts are largely unconscious things so they are a lot like breathing. When you can’t breath it suddenly dawns on you how important and real breathing is…but you have to have a mind that is open about examining present orthodoxies which the paradigm change has invalidated and/or made irrelevant. Otherwise you’re just an apologist for an outmoded concept. For instance, the technological paradigm change of the Gutenberg press was undoubtedly initially rejected by the church whose monopoly on hand written bibles would have made many say, “What about all the monks being thrown out of work?” Of course the church now made many more bibles and the monks went back to praising god more and/or admiring their fellow monks backsides. Paradigm changes are virtually universally beneficial changes which is another signature of paradigm changes and also why it is a historical truth that everything adapts to a new paradigm…not the other way around.

DT: If you increase everyone’s spending power it seems there would be no control over the availability of resources. Some may be deleted rapidly causing assured inflation of some products.

Me: Doubling everyone’s purchasing power does not necessarily equate to a doubling of consumption/economic throughput. The poor will have an increase in consumption for sure and even a substancial increase in over all consumption can probably be handled without any significant inflation even under a non-monetary paradigm change. If we have a 3-4% rate of inflation even with the regulatory and tax carrot and stick program I advocate in my book all you’d need to do is index the discount/rebate percentage to it. In other words if its 3% then the discount is 53%.

Now resource conservation and even reducing consumptiion level is an excellent idea, but that is a much easier thing for all consumers to agree about doing in an abundance situation with the new monetary paradigm than an austerity/scarcity of demand one like now. Paradigm changes have always resolved more problems than they later create, and because they always integrate the self interests of traditionally opposed constituencies, cooperation is also one of its signatures. Regardless, if we forever resolve inflation with the 50% Discount/Rebate policy then there is no longer any reason not to fund the fiscal mega-projects necessary to confront climate change like off and under planeting the dirtiest of production. All kinds of addional ecologically sane things can occur like incentivizing turning lawns into gardens to save water, re-enrich the soil and de-centralize/disinvest the agri-business cluster fuck that has destroyed our soil, reduced the vitamin and mineral content of what we eat by up to 80% and fostered numerous auto-immune diseases like Parkinson’s and Lupus. Paradigm changes are the ultimate integrative phenomenon which is exactly what we need because we’ve wallowed in idiotic dualisms for so long that we are now in a disintegrative trend. The key to accomplishing the thirdness greater oneness of the truths, workabilities and highest ethical considerations in seeming opposites is thinking and acting on the paradighmatic level. Most specifically the monetary paradigm which hasn’t changed for the entire course of human civilization. As I said before all of the leading economic reforms are well and good, but they haven’t recognized the biggest, most underlying economic problem that needs to be resolved is the current monopolistic monetary paradigm that the private banks now own and control.

GM: So this is really just some aethereal desire dancing about your little head.

So the Fed reimburses the retailer the full amount of the discount given to the consumer! And an army of ethically inclined accountants shall oversee the entire operation!

It’s a paradigm shift, right into the looney bin.

Me: No, this is a paradigm change in a single policy that mathematically forever ends inflation, doubles everyone’s purchasing power and potentially doubles the demand for every enterprise’s goods and services…all of which benefit and integrate the self interests of constituencies that currently are opposed. YOU’RE NOT LOOKING AT THOSE EMPIRICAL, MATHEMATICAL, AND ONGOING TEMPORAL UNIVERSE EFFECTS. LOOK AT IT!!! I’m afraid you’re stuck in a number of already invalidated orthodoxies that have the effect of making you a cynical non-looking troll. I’m sure you mean well, but cynicism never accomplished anything. Again, look at the immediate and ongoing effects of that single policy…let alone the rest of the paradigm change program.

GM: The only way everyone’s purchasing power doubles is an increase in the real value of money, that is half of it disappears, or production doubles.

Any other ideas are just nonsense, ‘temporal universe’ nonsense!

Me:

That’s a nice abstract, no longer relevant in the new monetary paradigm…orthodoxy. Like nearly every economist or economic pundit on the planet you are out of touch with temporal universe reality. When you go to the grocery store and buy a 12 pack of Bud Light that is priced at $15 for only $7.50 …THAT MEANS YOUR PURCHASING POWER HAS JUST DOUBLED. GOT IT??? And the retailer gets his $7.50 discount rebated back to him so he’s not punished in any way, but like every other economic agent benefits from the new paradigm for the creation and distribution of money. The Discount/Rebate policy is in fact a doubling of the value of money. Can’t you see that? Or are the mind filters and acculturation of economic orthodoxies just too much for you to see past?

Can you see this Stephanie? You want to get the most thorny of 3 or 4 of our economic problems completely resolved? Break up the monopolistic monetary paradigm of Debt Only by integrating the policy program of the new paradigm of Monetary Gifting into the debt based system. The monetary system and its present paradigm IS the root of the problem. Modern MONETARY Theory is about money after all.

GM: The private banks are heavily dependent upon depositors or lenders. If depositors or bondholders don’t like what the private banks are doing, that is frivolous lending, they pull their money. The banks own and control very little.

Me: The private banks create upwards of 97% of our money. Loans create deposits, and ONLY IN THE FORM OF DEBT. The banks are so powerful because of this monetary paradigm of Debt Only that they rise like a Phoenix from the ashes of every downturn or even disaster like in 2008…while every other busiess model and individual economic agent is forced to bow and accept the pain the private banks themselves create by liar’s loans and incredibly stupid things like the derivatives mortgage back securities, credit default swaps and synthetic credit default swaps. The “lonable funds” theory of money creation is false.

Utilize the new monetary gifting paradigm and its primary policy of a 50% discount/rebate policy at retail sale…to forever end erosive invlation and the policy door is open to resolving our other economic problems, creating abundance for all, the integration of the most desired aspects of both the left and the right’s economic agenda (economic democracy and tax cuts) and last but not least the ability to fiscally fund the mega-projects necessary to confront climate change.

Stephanie you really need to engage with me on this. MMT has the mechanics of money creation absolutely correct, but it still remains fully within the present paradigm of Debt Only. Reform is well and good, but a paradigm change is forever and a much deeper change. The clock for Chinese economic dominance is ticking because they take a much more pragmatic attitude toward debt and its elimination. And accelerating climate change is of course even more of a disaster…unless we can end the fiscal austerity we’ve been ignorantly following.

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

Me:

Neo-classical macro no longer “works”, actually never did. Learned that from about 10 years of listening to every video/podcast of Steve Keen, Michael Hudson, Stephanie, Warren, Randy, etc. Every present leading reform movement focuses on how the money system de-stabilizes the economy, but they’re too caught up in the theoretical and abstract complexities of the system when they should instead be hunting for the operant factor/concept in the current system that keeps all of its problems in suspension. That’s what a paradigm concept is, a description of the essence and operant factor of a system, body of knowledge or area of human endeavor. Paradoxically the key to perceiving and understanding paradigms is simplicity not complexity. That’s because paradigms are the quimtessential integrative of opposites phenomenon. It’s a single new concept…that learned how to apply changes an entire complexity.

Stephanie, are you aware of the mass movement between the two world wars started by a guy named C. H. Douglas. It was called Social Credit. Douglas first came up with the idea of a universal dividend, what is referred to now as UBI, and he also suggested we have what he called a compensated retail discount. This second policy (UBI and a job guarantee are also good ideas and a part of my new paradigm policy program) was a potential game changer. The problem was Douglas still lived in the equilibrium mindset of economics and he pre-dated Kuhn’s elucidation of the paradigm. I’ve taken the compensated retail discount and simply made it a high percentage point at retail sail. Such a policy has macro-economic effect because it is at the terminal ending point of the entire (legitimate) economic/productive process where production exits the economy and becomes consumption. It is also hence the terminal summing point for all costs including profit for every item or service and also the terminal expression point for inflation. Hence a 50% discount to the consumer at retail can forever slay inflation (garden variety inflation is generally a smallish single digit percentage, bad inflation like now as Stanford accurately describes is generally less than 10% yoy and hyperinflations never occur unless several disastrous circumstances take place first including finally with the banks leveraging up currency speculators who short the currency and that is when the true hyperness kicks in. All of the disastrous circumstances can be avoided most especially the final stage by a sovereign currency nation declaring that any attempt to anti-socially profit from de-stabilizing its money system be “null and void”.).

As stated here before a 50% discount to the consumer 1) immediately, empirically and continuously doubles everyone’s purchasing power by implementing beneficial price and asset DEFLATION into profit making economic systems (holy orthodoxy busting reality that is), 2) with the rebate of the discount back to the merchant it makes them whole on their overheads and profit margins and doubles the potential demand for every enterprise’s goods and services, the very description of good economic times and 3) ends any rational objection to fiscal deficits to upgrade infrastructure, re-industrialize the US and fund the mega-projects necessary to fight climate change. Let’s stop palliating the problem (the current monopolistic monetary paradigm) and change it…before its too late.

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