EZ:   Craig: To make sure we have the same view of the economy, here’s my view:

GDP is the measure of our productive economy. GDP is the sum of household, business and government spending (and likewise the income of those sectors equals that spending, because all spending is someone else’s income). Our economy depends on household spending (2/3 of GDP). That spending is limited by household income (which comes only from those three sectors). Business provides that income to the extent demand (business opportunity) exists, and government provides the rest (by way of bookkeeping entries to household bank accounts). All that’s important to the economy is maintaining this flow, and with a fiat currency (whose value, by definition, depends only on currency-users perception), there are no limits other than that perception.

The household spending portion of GDP is the FINAL sale of products & services. I’m assuming that is specifically what you’re proposing to discount & that the reimbursement will occur by crediting the vendors’ bank account upon receipt of their submission of their sales report. (The report format & timing requirements would need to be revised & the reporting fully automated (ie, paper eliminated) for the benefit of both vendors & BEA. Full automation would be especially important to ease the burden on small retailers, landlords & service providers, especially those in the household construction and maintenance sectors.)

GDP would dramatically increase, but not necessarily double (with a 50% discount), the PCE/GDP ratio would significantly increase (which I’d deem a significant improvement in manageability of the economy) & I’d expect to see a significant reduction in payday loans & some increase in personal savings. If staple goods/services constitute the major portion of GDP, inflation should not be a problem, due to competition.

The advantage over a UBI would be that the government spending flows directly into household spending (rather than some of it going into savings & investment). I expect that vendor resista/nce would be the most difficult part of selling the program, which could be overcome with a well-designed reporting/reimbursement system (mobile reporting, instant reimbursement). Political resistance could be minimized by starting with a small discount, increasing as the program proves itself. All in all, seems like a reasonable proposal.

Me:  That appears to be good detail to me. I would say however that integrating the discount/rebate monetary policy with both a universal dividend and a job guarantee is perfectly doable because of the finality of it being implemented at the terminal ending point at retail sale, and because of how those policies would enable us to completely step out of the current paradigm and implement fully direct personal and fiscal distributism. Taxation is a legitimate sovereign power and right to discourage economic vices and encourage economic virtues, but re-distributive taxation is old paradigm and unnecessary when direct fiscal distributism is made possible by the 50% Discount/Rebate policy. I see no reason to keep any unnecessary foot in the old paradigm.

DT:   Craig, I sometimes wonder if you can read! I outline the argument for credit cards as a paradigm for giving people “money” when they need it, paid for by their earning it, and you come back saying “Nobody has suggested a program nearly as comprehensive and immediately effective as my new monetary and financial paradigm”!

So you want us to give back money to those who already have too much, but not to penniless producers turned off their land so trees can be chopped down to grow stuff for beef-burgers and margerine?

It seems you have never thought about Malthus’ problem, never mind our current need for self-imposed austerity in both consumption and reproduction (i.e. overall birthrates), hence the need for local control information and global mobilisation of tree-replanters. But are you SEEING what I am saying, or as usual just LISTENING to yourself?

Me:   Dave, a credit card is not a monetary gift, it is a DEBT….and that places you unmistakably in the private banker’s mindset and paradigm of DEBT ONLY as in a monopoly paradigm. The monopolistic onlyness, especially in supposedly COMPETITIVE free enterprise economic systems, is precisely what is problematic and wrong. Comprende?

The Adamic curse was lifted over 2000 years ago. It’s time we applied it to the economy and money system. Or does it not apply there?

Now if you’re an entrepreneur or business person and you want or need to increase your production, or a home buyer the national publicly administered non-profit banking system will be happy to create and LEND you the required funds…at o%…unless you’re a hard core pornographer or drug king pin or something….then you’ll have to go to the private financiers with someone’s already created and saved profits or incomes and they’ll intermediate your project at a rate of interest that I’m sure would be a “deal”.

“So you want us to give back money to those who already have too much,”

Of course of those who have much, much is required, but the politics of envy are largely irrelevant….and old paradigm as well.

“but not to penniless producers”

Not relevant critique. As I showed Ken, my program of a dividend and a job guarantee enables his homeless Portlander to have over $52k worth of purchasing power per year. Solidly middle class for an individual.

“turned off their land so trees can be chopped down to grow stuff for beef-burgers and margerine?”

A sovereign, and under the new paradigm’s policies an obviously benevolent government, people will not be extortable and having knowledge of their prior oppression will undoubtedly be sensitive to the caprices of commercial interests who also being under the gracious but sovereign purview of the government, will not have free reign to exploit.

“It seems you have never thought about Malthus’ problem, never mind our current need for self-imposed austerity in both consumption and reproduction (i.e. overall birthrates), hence the need for local control information and global mobilisation of tree-replanters. But are you SEEING what I am saying, or as usual just LISTENING to yourself?”

Doubling purchasing power does not equate with a doubling of commodity consumption.

Select additional subsidization of green consumer products and the enabling of funding for the mega projects necessary for ecological survival…are a primary part of my program and end the idiocy of such being “too costly” under the current financial paradigm of Debt Only.

I’m sure there’s a gracious integration of population control within ecological survival…but it won’t have any possibility of enactment unless we awaken to the new monetary and financial paradigm FIRST. The new zeitgeist is grace and the current zeitgeist is power. So maybe you should figure out what that means.

EZ:  Craig: Where can I find a definitive description of your Direct and Reciprocal Monetary Gifting proposal?

Me:  In my book on Amazon entitled: “The New Monetary Paradigm and Its Policies….Change Everything” which I’m re-writing presently for conciseness and policy emphasis. Give me a week to finish the changes.

The actions of the 50% Discount/Rebate policy at retail sale perfectly describe and express the new paradigm. All merchants opting into the policy (read all of them because to opt out is to become completely uncompetitive) agree to reduce any and all product or service prices by 50% and open an account for all sales entitled discounts. The total amount of their discounts to consumers is rebated back to them by the monetary authority whether that is a new actually publicly administered federal level monetary authority or whatever authority is mandated to fulfill the rebate, and in so doing make every merchant whole on their overheads and margins of profit.

As retail sale is the terminal ending point of the entire economic/productive process for every consumer item from a package of chewing gum to an automobile or home and is by definition also the terminal expression point for all economic and monetary factors, like inflation for instance, because it is the point where production becomes consumption. If possession is 90% of the law, then possession as in consumption at retail sale is 99.9% of economics. That means everyone’s purchasing power just got doubled at the very least (the dividend of course is additionally doubled purchasing power and enables transfer taxation elimination).

Price inflation is typically a small single digit percentage so the net percentage discount insures beneficial price deflation, and even if after the taxation discouragements and further sanctions I recommend in the new paradigm program to inhibit greedy anti-social businesses from inflating still somehow results in say 1-4% overall inflation….you just make the discount 51-54%.

Hyper-inflations never happen without several specific and disastrous circumstances happening like a prior war and the destruction of most of a nation’s productive capacity and then a compliant central bank that leverages up speculators who short the currency that initiates the actual final hyper-inflation. That plus high-tech capital intensive economic systems are costly and still competitive meaning they can’t just raise their prices arbitrarily high without losing market share. So never mind the straw man/rabbit hole of the hyperinflationistas.

The $1000/mo universal dividend, 50% discount/rebate policy and national publicly administered non-profit banking and financial system and other regulations eliminate inflation, the need for transfer taxation for welfare, unemployment insurance and social security.  The second 50% discount/rebate at the point of note signing for any and all green technologies and green consumer goods super charges the ability to purchase and necessity of finding renewable energy and resource alternatives.

Doubling purchasing power does not equate to a doubling of consumption or commodity through put.

We haven’t acted/created effective policy for climate change and renewable sources of energy for almost 50 years. The policies I’ve suggested will FINALLY enable and streamline what we should have been doing for that period.

The new monetary paradigm ends the paradox of thrift and with its directness greatly homogenizes the so called “fallacy of composition” in economics and the money system.

Nobody has suggested a program nearly as comprehensive and immediately effective as my new monetary and financial paradigm. MMT only talks about government debt. Public Banking is a mere reform. UBI/QE for the people is a mere bone toss to we serfs. Hudson’s diatribes against finance are spot on but there’s no policy program to do anything effective about financial illegitimacy. Keen exposes financial instability, but again has no insightful or comprehensive way to accomplish the new paradigm he says we need, and then squirrels off to dealing with energy. Indeed, a very important area of research, but an excellent example of focusing on problems to the point of the neglect of solutions. We don’t need intellect nearly as much as we need wisdom….which of course includes intellect.

Retail sale. And that is how and why a direct and reciprocal monetary policy at that point resolves virtually all of the problems that macro-economists currently puzzle over in our monetary economy. Too simple for the erudite to countenance, too much of a plain as the nose on your face part of the otherwise complex economic calculus to perceive by same….and too utterly beneficial to every legitimate economic agent….to be denied.

It (the 50% Discount/Rebate monetary policy) is the very expression of the new monetary and financial paradigm of Direct and Reciprocal Monetary Gifting.

For any corporation, domestic or foreign, using fake accounting to pay no tax there will be a 2% tax on their gross revenues in order to be able to participate in the 50% Discount/Rebate policy, and they will have to faithfully obey the rest of the gracious policies and regulations.

Conservatives are always on the wrong side of history because evolution is a fact and the true underlying nature of the cosmos is grace as in interactive, integrative flow through time and space.

Steve Hummel 11/28/2019

99% of the complexity in economics will be eliminated and/or integrated positively and constructively when we recognize that private for profit money creation is NOT a legitimate economic business model, is an incredibly stupid and glaringly contradictory monopoly in supposedly competitive free enterprise profit making economic systems and that the monopoly paradigm of Debt Only as the sole form and vehicle for the distribution of credit/money needs to be integrated with the new monetary paradigm of direct and reciprocal monetary gifting.

“It’s the monetary and financial paradigm, stupid.”

BZZZZT! Okay, everyone can go back to figure, figure, figuring on lower levels of analysis than the entire pattern/paradigm.

WM:  Yes tax liabilities become the prime mover.

Me:  Yes, sovereignty is a legitimate right and function of government in a monetary economy. And in an economy rigged toward systemic monetary austerity and individual income scarcity by the monetary and financial paradigm of Debt Only it is the imperative of the government to find direct and reciprocal monetary policies at a most powerful and economically significant point (think retail sale) that change those conditions into abundance and free flowingness.

Sovereignty, abundance and free flowingness by the way are all aspects of the natural philosophical concept of grace. It’s important to be philosophically thorough going and aware don’t you think, Mr. Mosler?

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

Me:  All economic theories are based on a paradigm of scarcity. With the new paradigm of Gifting, monetary abundance for all agents implemented by a sufficient universal dividend and a 50% discount/rebate monetary policy at the point of retail sale inverts the current paradigm’s “reality”.

We have tremendous productive capabilities. We just don’t have the general awareness of how to effectively implement monetary abundance as per above so that every agent can partake of that abundant production, the system is greatly stabilized, its current most thorny problems are resolved our ecological problems can also be adequately addressed.

Like all paradigm changes it’s as simple and yet pattern changing as that.

KZ:  Craig, one of Smith’s conclusions with which I agree is that money is not value. It is also not scarcity. In Smith’s time and even today scarcity of resources (e.g., food, shelter) does occur. Sometimes with negative consequences. How does your proposal deal with such situations? For example, the current national housing shortage in the US. After all, people can’t eat dollar bills or live in cabins made of them.

Me:  Money has value when the government says it has it, and when the money system enables abundance for all agents individual and commercial, domestic and international….it will continually have value….because it’s a monetary economy not a barter one, money is an excellent tool and the purpose of profit making economic systems is to produce in order to profit.

Money as in individual income and business revenue is scarce in ratio to our tremendous productive capabilities, and that scarcity is enforced by the monopoly paradigm of Debt Only by the illegitimate economic business model of private for profit finance.

A national non-profit publicly administered and directly distributive money system with the policies and regulations I’ve advocated here many times would eliminate that monetary scarcity, increase our productivity (very few of our resources are actually scarce and those that are can be either rapidly increased or replaced by better, more innovative and more rational alternatives) and finally get off the dime of actions toward ecological survival by a bottom up monetary subsidizing of green consumer products at the point of retail sale and additionally at the point of note signing.

KZ:  Craig, stop thinking in terms of economics for a moment and instead think in terms of people and the problems they face. A great many of these can’t be solved with any sort of re-distribution of money. US cities now face a shortage of affordable housing. Government could simply give those who can’t afford housing more money so they could then afford the housing. But this only makes owners of rental housing richer, and still richer without helping society. Take the situation in Portland, OR for example. First, Portland is addressing the problem as a community, not as economists. Housing construction in Portland slowed to a crawl during the Great Recession just as the region’s population growth took off, with rent prices spiking as a result. The housing affordability crisis grew huge. Even with the rental market now cooling off, housing costs are still way higher than a decade ago, and nearly two-thirds of Oregon’s low-income renters spend more than 50 percent of their income on housing. The double-digit rent increases of the last decade are still with us, and Portlanders continue to feel the pinch. One lesson here is that the private market — even when behaving at its best — doesn’t produce housing that’s affordable for all Portlanders. For people living on disability payments, unemployment insurance, or Social Security checks, even bottom-rung housing has become too expensive in the private market, so the public sector is being asked to step in. Equally so for minimum wage workers, of which thousands live in Portland. Portland and the State of Oregon are building more publicly subsidized affordable housing units than ever. The city’s production of affordable housing units reached an all-time high in 2018 — and thanks to bond measures approved by voters in 2016 and 2018, that trend is likely to continue. But there’s one hitch. Affordable housing isn’t affordable for everyone. We’ve learned that the definition of “affordable housing” is somewhat loose. For example, a two-bedroom apartment that costs $1,450 per month can qualify as “affordable housing” under the city’s matrix, even though most low-income families couldn’t afford it. One problem, housing bureaus focus a lot of their money on making apartments affordable for families earning $35-40k a year (or about 50 percent of median family income), even though the biggest need is among families making $25,000 or less a year. But this could be changing. The affordable housing bond that passed in 2018 requires nearly half of all funds to be used for housing for Portland’s poorest residents. That’s expected to make 1,600 new units available for families earning less than $25k per year.

But why is all this work necessary? The homelessness crisis is bigger than you might think. About 1,700 people in Portland are sleeping on the streets or in their cars each night. But that’s only the tip of the iceberg. On any given night, another 2,500 people sleep in emergency shelters or transitional housing, and thousands more are couch-surfing and “doubling up” with their friends or family. The problem also isn’t static. About 32,000 Portlanders currently spend more than half their income on rent, putting them one bad month away from slipping into homelessness — and because bad months happen, many people do. It’s not fair to blame migration. Nearly 600 people move to Portland every week, and a very small number of them are homeless when they get here. But that’s not what’s driving the crisis. According to the 2017 “Point In Time” count, most people experiencing homelessness in Portland either grew up here or became homeless after arriving, and most of the inbound migration that does occur comes from Portland’s suburbs and other parts of Oregon. The bigger problem is housing costs. The cities with the highest rates of homelessness all have one thing in common — sky-high housing prices. From Portland to Seattle to San Francisco, the lack of affordable housing has put the squeeze on renters and increased the odds that one missed paycheck or medical emergency could lead to eviction. In 2017, Multnomah County became the first West Coast community to reduce veteran homelessness to “functional zero,” meaning that more vets are exiting homelessness than entering it and newly homeless vets are being moved off the streets within 90 days. The county placed 1,200 homeless vets into housing during that two-year period — so it’s not like the problem is insoluble. Public officials know a lot about what works, but they can’t fix the problem alone. So, lots of people are chipping in. Maybe someday the federal government will give cities the funding they need to make universal housing a reality, but until then, it’s going to take a team effort — and lots of Portlanders are already stepping up.

Thanks to the Oregonian newspaper and the blog Bridgeliner for all this information.

Me:  Ken, the genius of doubling everyone’s purchasing power is that the discount would cut housing prices in half…which is a lot more immediate and effective than any other policy I’ve seen advocated here. Part of the model in my book of course also utilizes taxation for one of its few legitimate purposes, that is to punish greedy and destabilizing price rises by taxing them at a rate of 100%. I have stated here before that I thought Henry George was ahead of his times in some respects and a land tax might also be a part of the new paradigm program. My suggested Department of Competition, Innovation and The Bully Pulpit would exhort rental enterprises to keep their prices low, point the public finger at them if they didn’t, tax them, take away their discount/rebate privileges if they chronically raised their prices without having actual additional costs and finally the national publicly administered non-profit banking system would be happy to fund their competitors and/or innovative and socially sensitive start ups in the rental sector.

Some MMT economists, being stupidly ideological instead of wisely integrative have dissed the idea of a universal dividend and pushed the idea of a jobs guarantee. I suggest that we have both. That way the homeless could have $1000/mo. of purchasing power with the dividend and if they had a 30 hour/wk job paying $10/hr. they’d have an additional $1200/mo. and with the 50% discount/rebate policy that’s $2200/mo. x 2 or $4400/mo. or $52,800/yr.

Have you heard of a better, more beneficial and problem resolving system than that?

DT:  Craig, listen to Ken telling you to “stop thinking in terms of economics for a moment”, think of his social problems, but get real too about the environmental crisis.

You claim “We have tremendous productive capabilities. We just don’t have the general awareness of how to effectively implement monetary abundance as per above so that every agent can partake of that abundant production, the system is greatly stabilized, its current most thorny problems are resolved. Our ecological problems can also be adequately addressed [with] ecological survival by a bottom up monetary subsidizing of green consumer products”.

However, even green production uses resources and poisons the environment. Ecological survival requires us to not only reduce production and pollution but to regenerate resources and clean up the existing pollution, i.e. plant trees much faster than we are destroying them. But today’s “scary” scientific news is that carbon dioxide is going up fast just when we were hoping (with all our solar panels and electric cars) it might be going down a little. The major worry is that the Greenland ice cap may soon melt, causing sea levels to rise around 7 metres, drowning major cities like London and Calcutta. What we can see are forest fires creating carbon dioxide on an alarming scale, and a warming atmosphere generating wild wet weather.

Me:  Dave, while I’ll agree with you that the sky IS falling…if you can come up with a better solution than creating a directly distributive and gracious monetary and financial system that creates a bottom up consumer jump start to green consumer products and enables virtually unlimited fiscal resources to fund the mega projects needed to do all of the other things you suggested….then I’m all ears.

My 50% discount/rebate policy at retail sale, non-profit publicly administered financial and monetary systems and other related policies and regulations integrate and synergize the goals and capabilities of Keen’s financial de-stabilization hypothesis, MMT’s fiscal expansionism, Ellen Brown’s Public Banking movement, QE for the People advocates and is perfectly in line with all of the theoretical critiques of heterodox economists on this blog.

It’s astounding to me that you guys aren’t all over this and getting on the bandwagon with me here.

????????????????????????

KZ:  Craig, I frankly don’t know if what you propose is better, more beneficial and problem resolving that other possibilities. As I’ve said before, only practical applications can answer those questions, if not completely, at least in part, hopefully. Try it out.

Me:  Oh come on. Is the homeless person in Portland better off with the nothing he or she has or the nearly $53k/yr. with a dividend, a job guarantee and a 100% increase in purchasing power of every dollar he or she makes with the 50% discount to everything they buy including a rental apt?

Every one of the policies I advocate are imminently practical. They apply directly to the economy and directly to people AND THEY DO SOLVE THE SPECIFIC ECONOMIC PROBLEMS EVERY HETERODOX ECONOMIST HERE HAS IDENTIFIED. Systemic austerity. Check. Chronic individual income scarcity. Check. Price and asset inflation. Check. Fiscal austerity. Check. Going no where fast on climate change and the need for renewable energy sources. Check. The effective dealing with commercial decision makers temptations to inflate prices due to chronic systemic scarce individual income by doubling the potential revenue actually available, and with hard and fast taxation and loss of rebate privileges if they continue to inflate. Check.

They’re all hands on, imminently practical and applicable. It’s the abstractions and theoretical talking points that, while I completely agree with them, DON’T GET US ANYWHERE.

No, what I advocate is BOTH philosophically AND practical policy-wise…COMPLETELY RELEVANT AND FAR ADVANCED over any other musings presented here.

Look at it. Get real.

KZ:  Oh come on, Craig. What you propose helps no one until it is implemented. And even then may not help. I’ve been charged with implementing lots of projects that were all described with the words you use. Out of 50 or so projects never had one that went through smoothly or ended up looking like the diagrams on the computer screen. And I’ve had only two that did not draw opposition. I hope yours is the exception. Try it out. We’ll see.

Me:  Oh come on, Ken. You “rebut” with an irrelevant sophomoric reply that no one would or could disagree with….and in the mean time fail/refuse to ACTUALLY look at the immediate mathematical, empirical temporal universe realities that the policies and regulations I advocate would effect.

No proposal you’ve ever overseen has been slam dunk beneficial and win-win TO BOTH SIDES of the table as my policies are for all economic agents…..otherwise they wouldn’t be there. They’d be out pressuring the system for the changes.

Paradigm changes are UNIVERSALLY BENEFICIAL changes. Did we ever go back to nomadic wandering across the land as the major lifestyle after agriculture was discovered? Do we still think the earth is the center of the universe? Did we go back to the Catholic church being a monopoly on the sacraments? Will people and enterprise ever go back to being debt slaves and serfs to private finance’s paradigm of Debt Only after they see the obvious, immediate and freeing benefits of Monetary Gifting intelligently integrated into the economy?

Start thinking on the level of paradigm change where you think in terms of solutions instead of problems, pattern progress instead of nit picking and obsessive potential roadblocks.

Recognize that new paradigms are new singular concepts for entire patterns, and study historical paradigm changes to decipher their universal signatures that I have posted here before numerous times.

I know its hard to shift one’s perspective from problems, but just keep looking at the solutions Monetary Gifting effects…until you actually see them.

KZ:  Such examples may be sophomoric to you. But they’re not to those who have to make them work.

Just two quick questions to test your resolve, you might say. How do you plan to respond when you receive a court judgement saying what you propose can’t be implemented because it violates laws …..? And how do want to respond when the Koch network shoves in 100 million dollars to defeat your proposal? You’ll need lots of help from attorneys and politicians. Can you get it?

Me:  As I said you’re not telling me anything I don’t already know….and have decided is irrelevant because what else is new, aspects of the discount/rebate policy and the rest of the program are already lawfully in use (just not the insight of where, when and how much to make it a paradigm change), people may be dumb but they’re not stuuuupid and traditionally opposed constituencies will be able and willing to see the universally beneficial nature of a genuine paradigm change.

It’s the revolt of BOTH the masses AND the bourgeoisie. Not for dumbsh!t ideological old paradigm capitalism or equally dumb and ideological old paradigm socialism, but for their integration/synthesis AKA direct and reciprocal monetary
distributism.

Yes, thirdness greater oneness is BOTH the mental process of wisdom AND a signature of historical paradigm changes.

Reply to I:

“Only a truly democratic socialist government could and would do this (apply MMT principles in practical terms for the benefit of all the people).”

Correction. Only a democratic direct monetary distributist government and money system would do this (apply MMT principles in practical terms for the benefit of all the people).
plutocrats and capitalists must be stripped of their power and of their financial capital. Nothing short of a social and political revolution will achieve that.”

First three sentences are fine. Placing a secure and un-extortable amount of power in a monetary economy, that is money, into the many hands of individuals so that their money vote determines whether or not an enterprise survives, is what will set us up to achieve that. That and a government backing up the policies of the new paradigm thus politically executing the unitary and ethical concept behind the new monetary and financial paradigm of grace as in sovereign and yet benevolent power.