A stipend/revenue sharing policy to state and local governments is a good idea and I have suggested that also in my book. The ultimate stabilizer and “revenue” sharing policy however is a 50% Discount/Rebate policy at retail sale. Why? Because everybody participates in retail sale making a 50% discount to the price of virtually everything an immediate and continuous MACRO-ECONOMIC doubling of everyone’s purchasing power. It also will potentially double demand for every enterprise’s goods and services so it integrates the self interests of both the consumer and enterprise. Finally, it will forever end inflation because we’ve never had 50% y/o/y inflation let alonf moment to moment such inflation rate. And with the proper carrot and stick taxation regime you can stop most if not all anti-social arbitrary price rises by all business models not just finance.

The real problem with economic theory is not even the leading reforms are analyzing on the operant concept/paradigmatic level. Hence thats what they are…reforms, when if you find the new operant concept and how to most efficaciously apply it…you’ve changed the ENTIRE pattern of the economy and also in this case the money system.

Part of the reason reformers are stuck in the current paradigm is they are so caught up in their abstractions that they don’t look directly at the economic process itself. Hence retail sale occurs hundreds of millions of times every day but no one sees the potential personal, commercial and systemic benefits of the retail price discount/rebate policy.

Reformists also miss the “knock on” benefits that come with genuine paradigm changes. Like for instance if you combine the 50% Discount/Rebate policy with a $1000/mo. universal dividend you make the payroll taxes every working person and every enterprise pay for welfare, unemployment insurance and even for social security completely redundant including their concommitant bureaucracies. That would raise everyone’s net pay 8-12%, cut business costs and insure every adult had $24k/yr. income for their entire adult life instead of having to work for 45+ years to get probably less than $2000/mo. Job guarantee? Sure, that also aligns with the new monetary and financial paradigm. Why not? When you’ve utterly ended any possibility of inflation you shut the mouth of every conservative and libertarian pundit and can run the kind of fiscal deficits to fund any rational program including a new Works Project Administration like the job guarantee, and even the under planeting or off planeting of the worst carbon emitting means of production so we don’t kill off most of the flora and fauna of the planet.

Paradigm changes are the most integrative of opposites and problem resolving phenomenon humans ever experience. They are the synthesis of Hegal’s dialectic that puts egg on the face of everyone who can’t see anything but the conflict of thesis and antithesis.

Here’s a few more problem resolutions and economic benefits of the new monetary and financial paradigm:

1) re-industrialization of the US in the most technologically efficient and ecologically sane way possible
2) elimination of most of the costly international supply chains we now have with China etc.
3) the opportunity for China to stop being paranoid about the fractious nature of their diverse cultural heritage and make a new social contract with their people…by implementing the new paradigm program in their own country
4) Imagine the possible social and psychological benefits of creating a continuous daily infrastructure for everyone to consciously or even unconsciously self actualize gratitude for being gifted 50% of the price of everything they buy…instead of feeling resentful about chronic inflation and thrashing around blaming everyone and everything…except the current human civilization long monetary and financial paradigm???

MMTers, Steve Keen, Michael Hudson, UBI advocates and Ellen Brown need to stop being erudite dunces and awaken to the power of the paradigmatic level of analysis.

DC: This conversation is way past orthodoxy nonsense that is just repackaged classical economics that was discarded to the trash bin during the great depression.

BS

This time is not different. Progressive fantasy economics, encouraged by new age economics, are leading our economy to a dark place.

20% of our debt it owned by the Treasury. MMT. 33% is owned by foreigners. The rest is owned domestically. The supposition that a direct transmission of credit from and to our government may at times work on the margin. However it does not happen in isolation. Inflation which can be transmitted by our currency weakening increasing the supply of money tipping the economy into an inflationary period as we are seeing now. Japan has seen its currency get destroyed by a third by essentially MMT. Essentially all salaried workers in Japan have seen their wages go down by a third while imported goods prices skyrocket. Japan with D?GDP at 250% is in a prisoners dilemma. They need to raise rates to defend their currency but the cost could send the country into a default.

Britain in the 70’s had 90%+ marginal tax rates, Fiat currency. An MMT paradise. It had to borrow from the IMF. Inflation was over 20%, a technical default. Each time the Callaghan government went to finance expenditures the currency collapsed. They only escaped through tough measures and going for growth.

I’d love to hear from the professor why I might be wrong but MMT as an expression of Keynesian economics that fits a coercive political philosophy is sadly “au courant” but wrong. Debt matters.

Me: Orthodoxies. Errant orthodoxies. Sorry. Debt that is actually debt matters. “Debt” that is actually just plain old money but is immediately prestidigitized into “debt” by the FED or treasury so it becomes a guaranteed asset primarily for the banks…is “DEBT”. That characterizes the national “debt”.

So don’t worry about it….just awaken to what has always de-stabilized domestic economies, namely PRIVATE PERSONAL AND COMMERCIAL DEBT, and on what will break up the monopoly paradigm of DEBT ONLY…which is to strategically integrate the new monetary and financial paradigm of Direct and Reciprocal Monetary Gifting into the debt based system.

RP: The currency itself is a government IOU, regardless of if it’s a green dollar or yellow dollar (treasury security). That US Federal Government IOU is excepted as means of payment in many areas of the world or can be exchanged for foreign currencies. You can exchange your yellow dollars for green dollars anytime you want. Just what do think the US Federal Government owes holders of Federal Government IOUs. You can pay Federal Taxes, fees and fines, but outside of that the only thing you’re going to get for your 20 dollar IOU is two 5s and a 10. You can buy whatever is for sale in US dollars with those US government IOUs (fed debt) any place in the world. They will remain in circulation or savings till the US government redeems in federal taxes. The only thing the US federal government owes is US dollars. US dollars are tax credits which drive’s the need for the currency (value) and assures acceptance at your local car dealer.

This quantity theory of money as the source of inflation has zero empirical evidence to support the theory in the real world (name one). The primary driver of inflation over that last 30 years has come from abusive market power coming primarily from energy, health care, housing and education sectors. Other than those primary area’s it’s always been something to do with a problem on the supply side. The high tax increases during WW2 in the UK and the US, was to control inflation due to the retooling of production to war supplies. As Keynes put it in his 1940 book “How To Pay For The War,” “moving from the Age of Plenty to the Age of Scarcity.”

The 70s and 80s oil price shock drove the inflation (cost push). US inflation around 20%, nothing to do with the money supply creating too much demand.

The US economy had been suffering from lack of aggregate demand for 50 years with high levels of unemployment and underemployment. This is not characteristic of the currency issuer issuing to much currency (Federal government “debt”).

Since COVID, demand has out stripped supply due to changes in consumer demands (what people buy) and loss of production from COVID. Other factors driving inflation are energy prices and abusive market power. This “federal government debt” you’re so worried about is responsible for the recovery of the 22 million jobs lost during the pandemic. IF you want to focus on debt you need to focus on private sector debt, that’s where the problems come from yet not word from you on private sector debt.

The value of the US dollar on the foreign exchange market is up, not down! How do Orthodox models explain that? It doesn’t sound like the capital market flows are to worried about the US dollar Armageddon. The backward fundamental starting of thinking that the taxpayers funds the federal government as opposed to the federal government funding the taxpayer is the starting point that leads to a bunch of nonsense that doesn’t add up.

Me: Excellent exegesis Rick. Especially your last point that the continual build up of PRIVATE debt is where the actual problem exists. That’s why my twin policies of 1) a 50% Discount/Rebate at retail sale which goes a long way toward addressing the failure of American wage gains for the 99% over the last 50 years and 2) my 25-50% Discount/Debt jubilee at the point of loan signing which (finally) continuously integrates debt jubilee into the economic process…are so paradigm changing. Imagine buying a new $60k Tesla for $30k and when you go to the finance guy you only have to borrow $15k. If you buy a $40k internal combustion auto you pay $20k at retail and get a 25% debt jubilee at Finance so you only borrow $15k.

I love MMT’s (correct) observations regarding the money system. I love Steve Keen’s (correct) Minsky’s Financial Instability Hypothesis. I love Michael Hudson’s (correct) Financial Parasitism Hypothesis. I love Ellen Brown’s (now somewhat watered down) Public Banking. Why? Because they are all valid observations regarding the paradigm of “money, debt and banks”. Their only problem is they are palliative reforms instead of an Operant Concept/Paradigm Changing program…like what I advocate.

So should we maintain the lesser value of reform or go for the gusto with paradigm change where all of the valid research is acknowledged and integrated into a more ethical, efficacious and PERMANENT survival phenomenon???

Intellectual vanity only hurts for a moment, but the death by a thousand cuts where an excellent reform like Keynesianism gets morphed into neo-classical macro leaves the well intentioned full of frustration and regret.

The real shame is the experience of god is so often farther from the individual than the belief in god.

Even if you knew you had a purpose, but you didn’t know what that purpose would be or exactly why it would become your purpose for 45 years of your adult life…because the postulate behind the purpose was to “get knowledge, get wisdom and whatever you do, get understanding” in a society that does a lot to distract you from finding exactly that, often even in the areas that should lead you directly to it…It’s still a wonderful life.

First off what I’m suggesting is not MMT yet would hasten the goals and genuine benefits that the MMT perspective on our money system would enable.

MMT is not utopian. It is a very good reform movement that does important things, namely clarifies the process of money creation in our fiat system and shows that we are monetarily sovereign.

My new monetary paradigm goes way beyond that because it breaks up the monopolistic monetary paradigm that forces new money to be created only with the burden to repay it. This is done strategically by gifting 50% of the price to the individual at retail sale and reciprocally gifting every cent of that discount back to the merchant so they are made whole on their overheads and profit margins. That single policy is a conceptual and temporal universe change in the character of both the economy and the money system, and there are further policies in the new paradigm that stabilize and bring many more benefits to virtually every agent.

The 50% Discount/Rebate at retail sale mimicks the exact accounting process that the private banks utilize to create upwards of 97% of our money AND YET with the equal debits and credits formula of accounting summing to zero and the character of the new paradigm (Gifting) ….changes the entire pattern while resolving its deepest problems.

You understand accounting. DO YOU SEE THIS STEPHANIE?!

As a 50% Discount/Rebate policy will forever resign inflation to the dust bin of history it will mean that fiscal deficits of whatever size can be run with impunity. Therefore, I suggest every state passes a law that asks the federal government to fund the universal dividend, the 50% Discount/Rebate policy at retail sale and any of the other specific monetary policies of Wisdomics-Gracenomics in transactions that take place in their states. If any of the states do not pass such legislation then the citizens of that state may travel to any state that has passed it and purchase whatever they so choose there…instead of in their state of residence. Lets see how long it takes the pols in any such non-passing state either have a come to Jesus moment regarding the new law, or are forced to hire private body guards 24/7/365. And the same goes for any federal representatives or senators who vote against complying with the states’ request.

And as to whether such a law of federal compliance with the states’ requests is constitutional or not, the basic question before the Supreme Court will be whether they back a monopoly paradigm by the Banks to create all new money as Debt ONLY, or do they back a paradigm that competitively still allows for debt, but the Banks’ paradigmatic monopoly is broken by the new paradigm of Gifting.

Pardon me, but a graciously uttered Fuck you! to any politician or supreme court justice who is so penny wise and pound foolish that they would even think of impeding a mega-paradigm change in economics and the money system.

What if I were to show you how a single policy implemented at a strategic point in the economic process not only ended any possibility of inflation, but resulted in what is considered impossible in every economic orthodoxy, that is, BENEFICIAL price and asset DEFLATION.

First a little ground work. All monopolies are problematic. Why, because they fly in the face of Lord Acton’s dictum that power corrupts and absolute power corrupts absolutely. So any time you break up a monopoly on whatever level you’re solving a major problem. Secondly, we know from Steve Keen that the basic problem with the current macro-economic orthodoxy is they ignore “money, debt and banks”. I would take that analysis a little higher by saying what is the current paradigm of new money and debt that is created only by banks/the banking system?

Think about it for a second, according to Keen’s excellent calculus and research private debt will inevitably build up and destabilize an economy unless we run fiscal deficits. This is an historically verifiable systemic truth, but it doesn’t recognize the core of that core economic problem, namely the
current (human civilization long) MONOPOLISTIC paradigm for the creation and distribution of new money. And that paradigm concept is…Debt as in burden to re-pay ONLY. The word ONLY marks it as a monopoly paradigm. In other words whether new money/credit was created by the Palace or by private banks it has ALWAYS been created ONLY as a debt that (allegedly) MUST be re-paid. That is the paradigm, the operant factor for the ENTIRE PATTERN of new money.

Historically, how do paradigm changes occur. 1) anomalies/problems build up around the current paradigm and we are deep into this process, 2) a new paradigm concept is floated and historically laughed at for longish periods of time, 3) a new tool and/or insight is discovered that enables the new paradigm concept (which concept by the way is always in complete opposition to the old/current paradigm making it apparently illogical and hence difficult for the scientific community to embrace it) 4) regardless, the application of the new concept resolves the old concepts major problems and in doing so brings virtually universal benefits while overturning orthodoxies that have grown up around it.

So what is the new monetary and financial paradigm and what benefits does its most strategically efficacious application bestow upon us? What is the opposite of burden to ALWAYS repay? Why Monetary Gifting of course, and specifically new paradigm concept is: Abundantly Direct and Reciprocal Monetary Gifting. And where and when is it implemented? At the universally participated in point in the entire economic process, namely retail sale. And what is the single policy that is the very expression of the new paradigm itself? A 50% Discount/Rebate policy at the point of retail sale.

What does this policy immediately, continuously, mathematically and temporally do? 1) it immediately doubles everyone’s purchasing power so if you make $30k/yr. you can now potentially purchase $60k worth of goods and services with that $30k, 2) with the rebating back of the discount the merchant gives to the consumer it therefore potentially doubles the demand for every enterprise’s goods and services and the “kicker” is 3) because a) every individual agent participates in retail sale and b) retail sale is the terminal summing point of all costs including profit for every item or service and c) also the terminal ending/exiting point of the entire economic process and d) hence by definition the terminal expression point for any and all significant economic factors, like for instance inflation…it not only ends any possibility of inflation it implements BENEFICIAL price and asset DEFLATION into profit-making economic systems. Holy orthodoxy and mind blowing inversion of reality is that!? But then that is what every paradigm change applied does to one degree or another.

There are a lot more enabled benefits than this in the entire policy program of the new monetary paradigm in my book, on my substack and Patreon websites.

Me: How do you create all of a roaring economy, accomplish the goals of Andrew Yang/UBI, Stephanie Kelton and every other MMTer, Steve Keen, Michael Hudson, Ellen Brown, enable us to effectively confront climate change, integrate the best aspects of the economic and political agendas of the right (tax cuts) and the left (economic democracy) and completely slay inflation…all in one fell swoop?Answer: Become a system’s philosopher and change the current monetary and financial paradigm which has been in effect for the entire course of human civilization, and has be-deviled humanity on many levels as a result.Every one of the above movements and areas of activism are reforms, EXCELLENT reforms, reforms that in fact point at and conceptually align with the new paradigm concept…but they haven’t recognized the specific new paradigm concept or the most efficacious points in the economic process to apply the new concept and hence temporally implement and change the ENTIRE PATTERNS of economics and the money system.Reforms are good…and always incomplete and temporary. Only genuine paradigm changes are permanently progressive. Let us begin to analyze on the operant concept/paradigmatic level and integratively solve the key problem, namely the current pattern, not just (ineffectively) hit at it with various reforms. Please.

DC: This is crazy insane.

Me: Yes, that is the way all new paradigm concepts are initially perceived because they are always in complete conceptual opposition to the present paradigm and its problematic set of orthodoxies. Nomadic Hunting and Gathering was in complete conceptual and temporal opposition to Agriculture, Homesteading and Urbanization. Likewise, helio-centrism required us to conceptually and temporally think in terms of complete inversion of the positions of the earth and the sun. It’s not easy to buck orthodoxies especially when they are coming from both sides of a duality, but when the new concept works to resolve the major problems
of the current paradigm and makes everything in the pattern under analysis function better all you have to do is keep looking at its actual effects…until it blows your mind.

The 50% Discount/Rebate policy at retail sale is such because it is the very expression of the new paradigm concept, Abundantly Direct and Reciprocal Monetary Gifting and its executed at the single point in the entire economic process (retail sale) that is universally participated in. Hence its mathematical effects are macro-economic. Those effects are an immediate doubling of everyone’s purchasing power, the potential doubling of available demand for every enterprise’s goods and services and not only the end of inflation, but the implementation of BENEFICIAL price and asset DEFLATION. Now that is an orthodoxy busting set of effects if I ever saw them.

SG: You should read Michael Hudson on the financial paradigm which has been in effect for the entire course of human history. I’ll bet that you will find that history is not what you assume. Why assume what that history has been when there are people who have actually studied that history and have written about what they have found? Did I mention Michael Hudson?

Me: I included Michael Hudson in my original post. I don’t know if Michael has actually expressed a specific new paradigm concept. I do know that he considers private finance to be a parasite which I totally agree with, and his research regarding the ancients doing periodic debt jubilees (which is what? Oh yes, a form of monetary gifting) is accurate and aligned with what I’m saying.

The only problem with debt jubilees was they were basically one-offs and hence palliatives, because ever rising private debt just went right back to being inevitable. We need to be smarter than the ancients, not stupider like now…and integrate debt jubilee directly and continuously into the economic process with my second most primary policy which is a 25-50% Discount/Debt Jubilee policy at the point of loan signing.

Put the retail sale and loan signing policies together and a $60k Tesla becomes $30k at retail and when you go to sign the note its reduced to $15k. If you buy a $40k internal combustion auto its $20k at retail and $15k at note signing (only a 25% debt jubilee). Likewise a $400k home is $200k at retail and $100k at note signing. As I said, the new paradigm and its policies resign inflation to the dust bin of history.

SG: The debt jubilee written into the Hebrew bible was periodic. Did you miss this part of Michael Hudson’s writings? Your ideas for writing in a jubilee into a loan may be novel. Let’s see some experts opine on how likely your ideas will work in the real world. I see problems with them myself, but I am not going to argue with you here.

Me: It WAS periodic. That was its problem. We need to integrate it continuously into the economic process. And that is what the 25-50% Discount/Debt Jubilee policy at the point of note signing does. Just do the simple yet macro-economically effecting math.

I’d welcome the opportunity to discuss and defend what I’ve posted here, particularly from Stephanie and from anyone else. Just remember two very important truths, new paradigms always explode orthodoxies and cynicism never solved a problem because it is about 5 microns above apathy and it’s exactly what the ruling elites with their paradighmatic control are hoping is everyone’s reaction to something actually new.

SG: New paradigms tend to explode orthodoxies. However, every idea that explodes orthodoxies is not necessarily a good idea. Let me explode another old saw. If I don’t have a better idea, that does not promote your idea to be a good idea.

Me: I wouldn’t dispute that last statement. However, if you or anyone else can find an applied concept that temporally and mathematically accomplishes more than everything I listed in my original post here and with only four basic policies (there is much more to the entire policy program in my book) …then I’m all ears.

Particularly a monopolistic paradighmatic power like private finance currently has been able to wield…for the entire history of human civilization with their paradigm of Debt ONLY as the sole form and vehicle for the creation and distribution of money.

It is bad enough that private finance has been granted the right to extend (or not extend) the life’s blood of every other economic business model and probably 95-99% of individuals, but to create and distribute it ONLY in the form of Debt makes it an operant pattern concept/paradighmatic power. Such a power utterly violates the idea of competition and is a complete failure to recognize the truthfulness and dangerous harmfulness in Lord Acton’s dictum that: Power corrupts and absolute power corrupts absolutely.

The job of supreme court justices is not just constitutionality. It is also the discernment of wisdom. Wisdom as in the exact key issue before them, and its ability to enable or prevent the greater Good. The current monopolistic monetary paradigm for the creation and distribution of new money has been unconsciously and detrimentally enforced upon us all for the entire course of human civilization. It is time to break up that monopoly paradighmatic power in order to resolve the deepest economic problems it continually keeps in suspension, and in so doing will usher in the kind of mental and temporal progress humanity has not seen since its self awareness enabled it to emerge from being merely part of the animal kingdom.

Paradigm concepts are deep simplicities which is another way of saying that they are wisdom insights which are the ability to pin point the operant outness in any given problem. This often makes them difficult to perceive unless one studies them with the intention of integrating the opposites that define and characterize any problem.

However, probably the biggest block to perceiving and accepting a new paradigm is the fact that they long acculturated phenomena because acculturation is largely a normalcy habituating and unconsciously accepting process when a paradigm change is a newness of what is required.

This fact also creates blind spots. For instance, private finance’s paradigm of Debt Only as the sole form and vehicle for the creation and distribution of new money is always administered either pre-production or post retail sale. This identifies it as being always and entirely an additional costing factor outside of the actually productive/economic process which is defined end to end as production, everything in between and production exiting the economy and becoming consumption at the terminal ending point of retail sale. This also identifies private finance and its monopolistic paradigm of Debt Only as entirely a cost adding parasite and hence an illegitimate economic business model.