….money won’t solve your personal problems. It’s also absolutely true that money WILL solve your economic and monetary problems. So I think that if you think about it for a few seconds and honestly answer the question, “Which would you rather deal with, BOTH the personal AND monetary problems of austerity or ONLY the personal problems of relative abundance? ….you’ll know which situation you’d rather find yourself in and which paradigm you’d rather back, the present one of Debt Only or the new paradigm of Direct and Reciprocal Monetary Gifting.

In other words undoubtedly the largest and most chronic component of  personal problems for the vast majority of the populace…IS monetary and economic austerity, SO resolving that problem with relatively abundant monetary gifting enables them to relax and have the time and the monetary resources….to work on their other personal problems in the midst of living their more abundant lives.

WM:  Speaking of paradigm shifting  — I’ll be on a panel at a DC conference in January that will address how we get to a new economy (and paradigm) that “is worthy of our affection.”  An unusual conflation of elements it would seem, and yet what is being discussed in this group about replacing the debt-only paradigm with the gifting paradigm seems to open the door for “solving” both personal and monetary objectives.

I’d be interested in hearing what you all think about HOW we get there.  What transitional visions do you have that are practical, possible, and perhaps even probable given the failure of our existing monetary system to meet public needs?  Co-operatives replacing private ownership, social-benefit commercial banking strategies and public banks, crypto-credit systems and local currencies are all possibilities. But how do we get them to replace our current systems?

Do you see a realistic path(s) forward to creation of a new economic paradigm “worthy of our affection?”  And if not, what are doing here?

Me:  First of all one needs to understand what a paradigm is. It’s a pattern, not a reform or even a new theory. Then one has to realize that a new paradigm is always a basic inversion of a deep reality, a deep systemic problem and/or an inversion of the old paradigm itself.

I’m not necessarily opposed to some of the suggestions you listed except they’re finger in the dike palliatives when a paradigm change is required, and given the fact that double entry bookkeeping, the money system and the pricing system of commerce are all digital/Debit-Credit in nature and so can be utilized to monetarily benefit both the individual and commercial economic agents by tying monetary policy directly to the point of retail sale where all costs and so prices are terminally summed and ended with a discount policy’s beneficial effects as I have previously described…why use these other mere monetary reforms when the discount and dividend policies fit seamlessly into the above systems and have staggering effects on both of them?

The best path forward is a mass social movement not unlike MLK’s civil rights movement that sells the obvious benefits of these policies to constituencies whose self interests dovetail with them as opposed to trying to convince orthodox economists whose educations and egos are an immediate and full stop, or to politicians whose lack of insight, courage, motives and actions even after they supposedly go into agreement with you…cannot be trusted. A non-partisan mass movement with the above policies crosses political and economic lines by accomplishing far more of the best of their separate agendas. Hence its ability to attract people from both sides and eventually herd the entire political apparatus in the correct new policy direction. This is the “new Powell memo” that all of the monetary reformers and cutting edge economic theorists need to “get”.

SB: Very briefly, because changing the world should not take much time, right?  (ha ha).
1.  Public banks in every state and most large cities or counties.  OK, you already knew that one. 🙂

2.  Shift to the Single Tax on Land – in all its natural forms: actual land, air & water pollution, and especially location in urban areas.  Untax all wages, sales and productive output (e.g. buildings, gumball machines etc.)

3.  A Basic income for everyone.  Here, the B.I.G. people, even the biggest fans, are missing something critical.  The question isn’t how will we pay for it, it is what money can be diverted to provide a B.I.G. that is already being spent?  This is different than just reallocating taxes because it takes into account that SOMEONE is spending to provide for people who aren’t working – to keep it simple – already, or else they would starve and be homeless.  Here’s the key: is SOMEONE, family, friends, private charities, or governemnt, is spending money to keep someone else in at least a subsistence level, then that money can’t be spent into the economy elsewhere.  You can’t spend the same money twice…well, you can if you track money over time, but that’s true regardless of where it comes from.  So, if you pay a B.I.G., that relieves money from being paid by other parties that can then go directly into the economy, bypassing the person who was getting it before.  THAT is how you “pay for a B.I.G.”  This works as long as the amount is kept low enough not to cause inflation or to get saved instead of spent; only the latter is stimulative.

4.  In conjunction with all the above, do a thorough national audit of all the nation’s CAFRs on every level, and keep doing it every year.  The American people think the country is broke.  It is broke…as long as you don’t count the 10s of trillions in the Comprehensive Annual Financial Reports.

5.  Introduce a Public Option for Money, issued along the model that President Lincoln did during the Civil War.  Control for inflation by something simple to understand and universally accepted.  The Output Gap fills those requirements but there may be other measures too.  Spend on infrastructure and save 50%.  Repeat.  And the next time the TBTF banks fail, let them fail and replace the lost money with a Public Option.

6.  Encourage Local Exchange Traded Systems.  I don’t know if the e-currencies will ever fill the bill, pardon the pun, but Berkshire Bucks and Buckeroos and many others are long established and work well to bind communities and stimulate local economies.  A Public Bank could help facilitate this.

Do all, or even some of these steps and you can grow the economy at 5-6%, sustainably, and forever.  Pollution will quickly diminish due to tough market forces, speculative booms and busts which are mostly land-based would be history, and wealth inequality would be brought down to manageable levels based on what people actually produce, not rent-seeking.

That is all you need to do.  Now, back to work on other things.  Let us know how many weeks you need to accomplish this 🙂

Me:  Those are actually some very good ideas, but they don’t characterize an actual paradigm change. And yes, paradigm changes sometimes take a very long time to be conceived and even longer to be perceived. The current (no longer workable) paradigm of Debt Only has been around for at least 5000 years which seems more than long enough to me, and the problem with merely chipping away at an old paradigm with reforms is that there are a zillion possible steps forward (and backward) between progress from point one to point two. Helio-centrism took over 100 years and a couple of additional tools and discoveries (the telescope and the discovery of the ellipse) in order to be completely perceived and confirmed. Thankfully a new human realization (which is the most essential and potent component of a new paradigm) takes the mere twinkling of an eye and the internet has the potential of virally greatly shortening its perception and realization by others.

Finally, your point number 2 actually is aligned with the new paradigm in the sense that it includes and expresses a new attitude toward taxation based on discouragement of economic vices (or mortal sins as may be the case) and encouragement of economic virtues via monetary gifting. Re-distributive taxation is decidedly an unethical aspect of the old paradigm.

JD:  That makes debt roughly as old as empire. Perhaps there’s a connection.

Me:  JD,  Yes, there is a definite connection there. Empires become necessary because there isn’t enough individual income produced in domestic economies to keep them stable, hence it becomes necessary to conquer and bring back wealth from the conquered in an attempt to provide such income.

You’re correct it must not just be a patch, but Wisdomics-Gracenomics is not a patch it is a new pattern/paradigm. As I said above a primary signature of a new paradigm is the switching/inversion of the primacy of the old paradigm and its aspects such as profit and enforced growth. Now a new paradigm doesn’t necessarily eliminate either of these so both profit and growth will still occur, rather it enables such a complete integration of them by the new paradigm (the graciousness of gifting) that their negative effects can be made rationally balanced.

The concept behind even the new monetary paradigm of gifting is grace (or call it atonement, satori or samadhi, they are all basically the same concept and experience) and the major aspects of the concept of grace are balance, equilibrium and flow…both internally and externally. I believe most people will adapt quite easily to the general abundance that Wisdomics-Gracenomics would create probably mostly because not everyone wants to be a tycoon. The tycoons and the sluggardly/unmindful will of course have some personal work to do, but with Wisdomics-Gracenomics at least they’ll have the time and resources to help themselves.

And yes, how much more art, literature and education could a society and civilization produce within an economics that enabled much more of the self chosen directed purposefulness known as leisure, and an ethic of grace as in love in action in the temporal universe expressed in so many beautifully artistic and instructive ways?

And yes, re-localization starts with the reversal of globalization, the self sufficiency and subsidiarity of national economies and the general economic democracy of the dividend and discount policies.

The FED, ECB, et al financial authorities don’t have a clue about what is necessary. Tweaking orthodox theories is obviously not enough. Heterodox theories are of course a somewhat deeper analysis, but even these are not going to be what is truly needed unless they are also accompanied by a thorough philosophical review and a new monetary pattern/paradigm. The money system and its current paradigm of Debt Only are the overwhelmingly significant factors in economic instability, and the economic system itself is monetary in nature not “a veil over barter”, so a new monetary paradigm is the necessary cognition (recognition for the first time) that must be discerned.

For all large asset purchases (mortgages and vehicles etc.) and speculative endeavors Finance will be a retailer only of business plan assessment, market saturation, credit-ability assessment, accounting, depository, title insurance etc. ….but not money creating authority.

Therefore it will be able to partake of the 50% Discount policy. Therefore its services will be mark up only and any interest charged will be determined by and come back to the monetary authority and be aligned with its philosophy and ethics.

Example:  Bank receives sales invoice of home builder for $200,000 home which has been discounted to $100,000. Bank and any other attending financial businesses and governmental agencies charge for their above relevant services, let us say an additional $6000. The $100,000 is affirmed by the monetary authority, paid to the home building corporation, the note is discounted 50% to $53,000 for the consumer to pay off and all costs and profit margins by the respective businesses involved including the mark ups for finance’s services….are paid by the monetary authority so that all can be whole on their overheads and margins.

Get over it. Finance has always been the problematic business model so the new final monetary authority must and will control it by keeping it ethical and sane.

Everything indeed is one, it’s just that it’s so nuanced by the appearance that the physical universe is an almost infinity of separate objects including our bodies…that we become habituated to that apparency. Truly open minded science however actually agrees with the oneness of everything, and as the quintessential signature of scientific breakthrough has always been the integration of the scientific method and an aspect or aspects of consciousness like imagination, visualization, intuition, integrativeness, creativity etc. …the integrative perspective of us simultaneously being both apparently separate and yet underlyingly one with the cosmos…makes perfect sense.

Steve Hummel 12/15/2017

…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.

Great set of theses. The Reformation is already under way thanks to your own and other’s work, complete recognition of the Copernican paradigm change requires an encompassing concept like Agriculture or helio-centrism that simplifies its vision and crystallizes aligned policies that clearly show how everyone would benefit from the change.

My new Wisdomics-Gracenomics policy innovation transforms the business model of Finance from a parasite into a retail business that takes its proper place alongside every other model, and changes the money system from endogenous and uncontrollable to benevolent and exogenous.

Washington Post story confirms President Toast is at best a useful idiot. So what are you going to do about that republicans? And what are we as both democrats and republicans going to do to throw off the dis-integrative direction the nation is going socially, politically and economically-monetarily…because utter contentiousness and division is the even larger strategy of Putin and the even deeper obstacle to re-integration and systemic rejuvenation…the paradigm of Debt Only.

We need to out produce and out reward both the orthodox capitalist and the socialist leaning economies in more ecologically sane ways, not so we can be better capitalists or socialists but to simply have a more abundant, more humane, more rational, more ethical, more whole and more ascendant third alternative.

Steve Hummel 12/13/2017