Me: Excellent post Rodger. Money generally staves off desperation and hopelessness. You still have the problems of wealth when you end the problems of poverty, but the choice between the two is a no brainer.
The natural philosophical concept of grace as in Gifting and its primary policy of a 50% Discount/Rebate at the point of retail sale is not only the new monetary and financial paradigm it is also the next new zeitgeist replacing knowledge and control with grace as in graciousness. Then we can begin to build a true “golden age”. So be it….with post haste.
RMR: The mechanics of the “50% discount to the consumer at retail sale” are unclear to me. Currently, prices are based on cost and competition. How would prices be determined for the 50% to take effect? Is this another way to create a deflation?
Me: Someone goes to Walmart to buy groceries or to a home builder for a new house. Participating merchants (read every one of them because why would they want to have to get 100% of their price when their competition who do participate only have to get 50% from their customers) Walmart or Acme home builders reduce their price 50% and log an entry in their sales account for the remaining 50%. The government or monetary authority creates the money and debits or credits it back to the merchant so they actually get their full price.
Voila`! One policy doubles the purchasing power of everyone’s earned income and thus also the free and available demand for every enterprise’s goods and services, not only forever slays inflation, but beneficially integrates price deflation into profit-making economic systems and so also enables the fiscal deficits necessary to create the best infrastructure possible as well as make green purchases for EV’s, solar panels/batteries skyrocket when we also implement an additional 50% discount/rebate policy at the point of loan signing for such green items.
Prices change daily. That’s a problem.
Think of this scenario: Today, Walmart sells widgets for $10.00 each. In response to the new law, Walmart increases the price to $15.00 each, collects $7.50 for each one sold, then uses coupons to cut the price back to $5.00 each.
Walmart has now collected from the government, an extra $2.50 each, though some people use the coupons and some don’t.
Now multiply that by the hundreds of millions of items sold by the many thousands of different retailers all over the country, with prices changing every day — billions, perhaps trillions of price changes.
Who is going to monitor all of that? d
And then, what about services? Does the process extend to the guy who comes to my home to wash my windows? Mow my lawn. My cleaning lady? My babysitter? How are their prices determined?
Think of the used car dealer negotiating his prices. What is the “real” price that will be the basis for the 50% from the government?
Then there is the question, does this apply only to retail? What about wholesale? Is wholesale included in the process? If not, who decides whether something is retail or wholesale?
Then, there are medical services, which are covered by Medicare, or by private insurance, or not covered at all. How are they handled? And think of all those deductibles.
Then there are home sales, the single biggest purchase anyone makes. Are they included in the process? If so, how would those prices be calculated? (Home prices include many factors — land, building, contents, necessary repairs, closing costs, etc.)
And by the way, is the 50% paid by the government taxable? At what rate? Does that give the IRS another job it can’t handle?
The bookkeeping is mind-boggling. I visualize a bureaucracy bigger than the Pentagon needed not only to monitor all that, but just to physically make the payments for it.
About the only good thing I can say about the complex process is: It would employ millions of people.
I would rather give $X to every man, woman, and child in America, and to allow them to use it as they please. Much simpler and fairer.
Me: Roger, While it’s always important to analyze thoroughly it is a mistake to over complicate when it comes to paradigms. The key to paradigms is actually their simplicity (they are always a single concept), their universality (the definition of a paradigm after all is an entire pattern) and the resolution of the major problems of the current/old paradigm (inflation despite individual monetary scarcity and systemic monetary austerity).
In the first place the accounting infrastructure for the primary temporal universe changing 50% discount/rebate policy is already in place. It will simply require another T-account to implement it. The slight continuous changes in price is of no concern as the 50% discount still mathematically creates beneficial price deflation for both commercial and individual economic agents. Secondly, in order to opt in to the wildly beneficial 50% policy you will have to click the “I Accept” button that outlines the rules, regulations and punishments for trying to game the system. If you read my book these include both tax incentives and disincentives (tax cuts for abiding by the rules and a 100% tax rate on any revenue garnered by large arbitrary unjustified price increases, and if one is a serial arbitrary inflater loss of the 50% discount/rebate privileges). Also, individual and corporate taxes will priorly be able to be reduced by at least 50% as the efficacy of fiat monetary systems with beneficial deflationary consequences become mathematically apparent, and if one abides by the rules further incentives could easily reduce rates even more.
Of course house prices and services of all kinds will be included in the 50% discount regime. All they will need to do is opt in and register with the monetary and accounting systems that will oversee the new paradigm. Certain businesses/products will not qualify for the 50% discount and they will have to get 100% of their price from the consumer like hard core pornography, cigarrettes, etc. Petroleum/gas prices will qualify for the 50% discount/rebate until their market share is drastically reduced by ecologically intelligent alternatives made much more competitive by the second 50% discount/rebate at the point of loan signing.
In my book I also sketch out the policies of a new government department semi-whimsically referred to as the Department of Competition, Innovation, Boycotting and The Bully Pulpit which will report flagrant rule breaking enterprises to the public. If social security is the “third rail” of government bureaucracy messing with the new monetary paradigm which just doubled your purchasing power, cut your taxes and saved the planet will become the public relations kiss of death for anti-social businesses. So be it.
RMR: Or, the government simply could send each man, woman, and child a $10,000 check, which not only is simpler (we already have done something similar), but it’s less regressive than basing reward on purchasing. It would narrow the Gap more effectively.
I assume you won’t like this because you wrote a book, but that’s also why Stephanie resists the idea that federal spending doesn’t cause inflation. She wrote a book.
By the way, my first book does allow that federal deficits do cause inflation, but I later changed my mind. It happens. Writing a book isn’t the end of learning. It can be the beginning of another book.
Me: My policies include both a $1000/mo. universal dividend which paired with the 50% discount/rebate policy enables everyone 18 and older to have $2000/mo guaranteed purchasing power, and a job guarantee. Those are both good policies, but they are just palliatives. The ancients, who were smarter than we are, used the debt jubilee to reset the problem (the monetary paradigm of Debt Only) which Is also one of my policies, but the burden of debt buid up always came back because again, the real, deepest problem is the current/old paradigm of Debt Only. The 50% discount/rebate policy integrates price deflation so effectively into profit making systems because it occurs at the strategic point/ending point of the entire economic/productive process and is so continuous,ubiquitous and abundant that debt will not build up.
Acquisition can become a mania that’s true albeit most do not fall into such even when they are quite wealthy. My observation is that graciousness is the solution to human life, and continuously and ubiquitously implementing graciousness as in Monetary Gifting would be a very nice way to make the self actualization of grace/graciousness a greater human reality. All you’d need is a reminder of the actuality of such for the experience to catch on.
S: I’ve come to believe that Social Security is not only a payment to retirees that they’ve earned and deserve, but also an indirect but still efficient government economic stimulus program. Since most SS money is spent rather than saved, and even in some cases, taxed back from wealthier recipients by the states in another form of redistribution, it is stimulative to the economy.
It is not the dreaded socialism, because it does nothing to control the means of production; seniors do that through their boosted purchasing power (i.e. demand).
It is also, of course, one of the greatest anti-poverty mensures ever devised. Those who oppose SS have no alternative, just as they have no alternative to the ACA. Well, poverty and death are the real alternatives, if left to the so-called “free market” which is not and never has been free (all the 19 megabanks would have failed in the GFC if left to the “free market”).
But as you point out, the desire to maintain the Rich-Poor Gap, plus the will of even those who would benefit, not to ever ever allow for anything that looks like a “free lunch” lest someone less deserving then them, in their opinion, benefit, will prevent SS from being divorced from the payroll tax mechanism.
Very soon, probably in the Biden Administration, SS is going to have to be “reformed” or else it will start “running out of money.” Neither Biden – who cares but is clueless – or Trump – who pretended to care but was also clueless – took their own lessons from spending trillions to fight Covid to heart. If Covid spending proved anything once and for all, it proved that the federal government could spend an almost infinite amount of money when it wanted to – unbound by anything except a shortage of things like PPEs and doctors (nurses’ salaries went up during the pandemic. Why is this a bad thing?). The public has actually finally begun to catch onto this lesson, but in the absence of socially beneficial spending elsewhere, and in the presence of asset market bailouts, the only way Joe Public can benefit is to buy stocks, bonds, or even ephemeral instruments like Bitcoin (I believe this will end badly, and may already be doing so).
Yanis Voroufakis and others say we are entering the age of Techno-Feudalism, leaving capitalism behind. Maybe so, but the neo-feudalists will only get even wealthier in that system. Buy stocks, bonds, land, etc. What else can one do?
Me: Scot, Yes social security is a good program but it’s not actually direct (you have to work, if you can find it, for 40-50 years before you can collect it) and it may not be socialism, but it requires socialistic re-distributive taxation which liberals have idiotically embraced in order to try to (unsuccessfully) stave off inflation thus pinning themselves to neo-liberal macro-economics and simultaneously setting up the eternal (and unnecessary) political gridlock we find ourselves in because enterprise will always oppose the additional costs of funding it and the left can’t think a new thought because it hasn’t recognized the better alternative of the new monetary and financial paradigm of Gifting.
The combination of a $1000/mo. universal dividend and the 50% discount/rebate policy at retail sale resolves inflation, guarantees a livable income for life for every adult 18 and older….and enables us (individuals and enterprise) to eliminate the payroll taxes for welfare, unemployment insurance and even faze out those for social security. In other words it is a better, more effective policy and politically integrative to boot.
By the way, what ever happened to Ellen Brown’s Public Banking Google group? I woke up one morning and couldn’t access it. I probably got banned for suggesting too many times that she work for creating a true public national bank instead of state public banks. State banks are like social security, somewhat better than rapacious rule by private banks, but a pale palliative reform that actually solidifies the the entrapment of the present paradigm. again better to envision a new monetary and financial paradigm which actually and thoroughly solves problems.
I became a bit lost in your one-sentence first paragraph, but “redistributive” is not socialist. Claiming that something is not socialism but is “socialistic” makes a mockery of English and logic. It looks like a sad attempt to hang someone with an epithet that doesn’t apply.
Shall we also claim that conservatism is not Nazism, but is “Naziist”?
Anyway, the U.S. tax code always has been ostensibly “redistributive” in that tax rates are higher for higher incomes. Are you opposed to that?
Unfortunately, the higher income folks know how to avoid past efforts at “redistribution,” and instead use financial “piggism,” the swinish attempt to hog all he money for themselves.
Me: “Claiming that something is not socialism but is “socialistic” makes a mockery of English and logic. It looks like a sad attempt to hang someone with an epithet that doesn’t apply.”
I’m for progressive taxation….but with much less overall taxation which is possible by making direct monetary distribution in a fiat system. The government must have the cudgle of taxation or you’d have complete economic chaos instead of the alternately goosed and strangled financial chaos we presently have. Taxation has largely become theft as the right says. They just have to stop demaguoging the socialism and embrace the policies of the new monetary paradigm. The left is correct that economic democracy is a good idea, but increased taxation doesn’t accomplish that….while the policies of the new paradigm do….in spades. Everyone needs to re-examine their own orthodoxies is all.
No, it’s just exposing the fact that the right considers it so. My statement agrees that taxation is not socialism because it isn’t government ownership of production, yet advocates for greater taxation play into the regressive agenda and strengthen political gridlock because they can’t think of better policy alternatives as I have shown are possible with the new monetary paradigm.
T: “…taxation is not socialism because it isn’t government ownership of production…
This simple fact must not be understood; otherwise so many people everywhere would quit using the “socialism” argument. And we wonder why economics is so poorly understood and taught.
But New Deal legislation IS indirect socialism; government still backs the private sector’s profiteering should those forward thinking, rugged individuals need bailing out from time to time, i.e. Chrysler.
Me: Yes it is kind of quasi-socialism in that sense. Wat we require is an integration of the interests of both business and the individual that is so beneficial that it is “an offer they can’t refuse” ….but with no uncertain rules that all parties must abide by. Like for instance if you opt into the 50% discount/rebate you agree to not inflate your prices unless you have incurred ACTUAL additional costs….additional costs that also consider the huge cost SAVINGS you receive by the elimination of payroll taxes and 50+% cuts in corporate income taxes. In other words there’s no gaming of the system or you get taxed for price increases and eventually lose your 50% discount/rebate privileges. In other words if you inflate Mr. anti-social asshole CEO…you lose the gracious benefits the government has bestowed upon you.
RMR: A couple of questions:
1. Which agency would audit this?
2. How much profit margins are the businesses allowed?
3. How much profit margin is a new business allowed?
4. What about newly created products?
5. Are executive salaries considered part of a business’s costs. (Including “Mr. anti-social asshole”?)
6. Does this apply only to sales to the public or are sales to other businesses included?
7. What about export sales?
8. Are imports included?
9. Are services included or just products?
I have a few more questions, but the above nine should help you crystalize your thinking.
- 1 My thought would be the new Department of Competition, Innovation, boycotting and the Bully Pulpit, but the IRS could also be mandated to doso. If not those two then I’d like to see a permanent Bill Black type forensic accounting committee to do so.
- 2 Whatever margin they can ge through competition and innovation but still not inflating despite their overall costs being cut by the new paradigm policies.
- 3 and 4 New businesses will have to abide by the same rules as their costs would also be cut compared to what they would have been before the new paradigm policies. True innovative products and services could probably be allowed to charge larger margins, but there are also policies that we need to implement break up monopolistic practices like we see in health care, pharma etc. must be eliminated.
- 5 Yes, of course.
- 6 Businesses other than retail buy retail products and they would probably be eligible for the discount. Capital goods producers, no. They would benefit though from lowered and eliminated taxes so they would be subject to punishment for inflating unnecessarily.
- Nope. One of the objects of the new paradigm is to discourage export platform nations and encourage more domestically robust production.
- For the present imports would qualify for the discount, but only if they do not inflate, then they are subject to the sanctions. One of the benefits of the new monetary and financial paradigm would be the capability of new domestic production due to the resulting cost savings. Hence we would undoubtedly become less dependent on imports.
1. It would require a department of at least the size of the IRS, not a “committee.” This would be a monster addition to the bureaucracy.
2. The allowed margin is the whole point of your recommendation. You would have to fix everyone’s margins or your system would fall apart. Think it out. Do you really want to be in the price-fixing business?
3. and 4. No one knows “what they would have been.” That’s the whole point of the question.” And what is a “true innovative product”? No one can answer that. You’re skipping by the real weaknesses in your program. Think it through. I’m helping you, here.
5. If the answer is “yes,” then all a company needs to do is raise CEO compensation, which would subvert your program.
6. Very vague definitions here. Easily re-defined by businesses. Again, think it out.
7. Really?? So an exporter’s price would be double the price domestically?? Goodby American exporting. You definitely need to rethink this.
8. So, you envision the United States government sending billions of dollars overseas to assist foreign manufacturers in lowering their prices???
9. My cleaning lady? My plumber? My gardener? The snowplow guy? My barber? How are you going to determine what their profit margins should be?
In total, you have suggested an uber Rube Goldian project, massive in complexity, that does nothing more than provide the populace with buying power — something that easily can be accomplished by simply sending people money.
- No, all it would technically require is the IRS. Once you opt in you’d be required to submit your accounting to them, and for the cost benefit savings and the absolute uncompetitiveness if you didn’t it would be a no brainer. You’re over complicating without considering the benefits to all economic agents.
- I don’t care whether anyone considers it price fixing or not. In actuality it’s letting enterprise charge their best competitive price…and then the monetary system, whose current monopolistically dominating paradigm IS the problem, now instead pays them half of that price, and for that benefit and inevitable additional sales and profits they are asked to restrain themselves from committing the economic vice of price inflation. If you want the benefits, you have to abide by the rules. That’s ethics is all.
3 and 4. No I’m not. Innovation isn’t hard to recognize, and besides as I said they’d still be subect to the same (actual not phony) cost accounting which only requires them to consider the genuine and considerable cost savings the policies make possible. If we can’t demand honesty from enterprise, well then we should probably just through up our hands.
- 5. No it wouldn’t. Executive compensation is a business cost, no?
- 6. There isn’t any thing unclear about whether you buy retail or not, whether you’re an individual or an enterprise. Retailers often give discounts for large purchases to business already. They may chose to continue to do that or not. Regardless, the discount/rebate policy applying would only benefit both parties. Again you’re over complicating here.
- 7.The point is to encourage domestic production and consumption (an economic virtue) and discourage (but not eliminate) exports (an economic vice) so as to prompt other exporters and export platform nations to see the benefits of the new paradigm and better serve their populaces by implementing the new paradigm themselves. Exports would still be profitable as they are now. No harm, no fuss.
- 8. As I said, for the moment yes…until enterprising Americans see how profitable the new paradigm is for them to compete, innovate and produce such things themselves. No harm, no fuss.
- 9. All they need is to opt in, register with the monetary authority in order to receive the rebate….and compete on price…or be short lived.
Basically the system operates seamlessly within the same accounting/economic infrastructure it already operates within. It’s just that it’s much more beneficial for everyone because the monopolistic, parasitic and increasingly uncompetitive/unworkable monetary and financial paradigm….is changed.
RMR: I disagree with every single thing you have said, but I respect your right to say it, comfortable in the knowledge that your program never will be implemented.
Me: You are of course entitled to your opinion, but the truth is that your concept of Monetary Sovereignty, which is a very good and valid concept, is what will never be implemented because it does not qualify as an actual paradigm change and does not have the policies (merely the demands) required to accomplish such. Unlike my policies, It does not have the ability to integrate the self interests of both individuals and commercial agents and hence lacks the possibility of political integration necessary to break through our current gridlock. Historically, everything adapts to a genuine paradigm/pattern change, not the other way around, but certain signatures must be fulfilled in order for it to be a valid and actual change needed. First it must be the actual concept that changes the actual problematic present pattern. (the monetary and financial pattern. Genuine paradigm changes have always been in conceptual opposition to the current problematic paradigm (For instance terra-centrism vs helio-centrism and in this case Debt Only vs Monetary Gifting). It must completely and immediately invert temporal reality with its policies (For instance individual monetary scarcity, systemic austerity and erosive price and asset inflation vs individual monetary abundance, systemic/fiscal abundance and beneficial price and asset deflation). Other signatures apply.
The real problem, identified by Steve Keen and Michael Hudson, is the fact that private debt always builds up and continues to do so despite the occasional reform, and has been recurrent since the time of Rome because they stopped doing debt jubilees which was the ancient’s relative solution to the debt problem. And even with that the debt jubilees needed to be recurrent because the debt problem still re-occurred.
The other thing economic reformists fail to recognize is that inflation has always occurred and will continue. MMT, which is a largely accurate account of the fiscal money creation process and scheme to increase fiscal spending, thinks that simply trying (and failing) to balance production and consumption will stop it, and anyone who thinks we can simply spend and not have erosive inflation will be severely disappointed when higher prices occur.
There are multiple identified reasons for inflation, but what economists have missed about it is that the ROOT and most PROBLEMATIC cause of inflation is that ultimately it is a DECISION by a CEO or other business decision maker and that there currently is no sure way to prevent this from occurring until now. With the large 50% discount/rebate policy and its strategic implementation point at the very end of the economic/productive process at retail sale inflation’s root cause is finally empirically and mathematically put to rest. With the discount/rebate the retailer gets his full price and every agent commercial and individual benefits by the discount’s “knock on” enabling policies.