@Conscious Being You are exactly right. Depreciation costs have been ever increasing for a couple of hundred years, and the subset of double entry bookkeeping, cost accounting and its correct and always in effect convention that all costs must go into price, is key to realizing that the lower bound of costs is literally at the bottom of the chronic inflation that plagues modern economies, not the misnomer of monetary inflation. Macro-economists splash around on the surface of accounting with debits and credits while not actually looking at the day to day operations of the economy where policy solutions to the economy’s problems can be ascertained, and being unconscious of cost accounting which enlightens the problems to be resolved.
There is lots of research I could bore you with, but I’m not here to do that. I’m here to wake you up, enthuse you and beseech you as young and purposeful people to unite and join me in getting a new monetary and economic paradigm implemented. The good and happy thing is that the new paradigm is all upside and beneficial….as all new paradigms are. All it really takes is to see it….and then never stop focusing on the insights and effects it will bring until they are indeed implemented.
The leading edge economic theorists all agree that modern economies are demand constrained, that private finance is a parasitical and problematic business model that governments should be sovereign issuers of their own currency. All well and good.
The problem is they apparently do not have the correct integrative mental skills to combine these truths in a coherent way nor certain insights into point and time in the day to day operations of commerce wherein monetary policy could be directly and reciprocally implemented to effect the new paradigm that would resolve the old paradigms deepest and most chronic problems, accomplish more stable individual and commercial freedom and systemic freeflowing-ness, more integration of the best and most ethical goals of opposing political agendas and more than any other factor better enable mankind to evolve out of the tawdry and restrictive bonds of an enforced homo economicus and into our true species designation, homo sapiens sapiens, in other words wise and discerning man.
Okay, so demand is short, banks and their paradigm of Debt Only are parasitical and problematic and public and particular creation of our money supply, as opposed to private banks doing it like now, is essential if we are to actually solve the former two problems. So what are the policies, regulations and agenda of the new paradigm that does all this alleged solving?
1)Continuous $1000/mo. dividend for everyone 18 years of age and older.
2)A 50% discount/rebate policy at the point of retail sale for every product or service.
“Oh, you say, these will cause terrible inflation!” No, because retail sale is the point and time where consumer price inflation is terminally summed and expressed….and now there is a huge and beneficial discount to prices that immediately doubles everyone’s potential purchasing power. In other words if you as a student get your $1000/mo. dividend the 50% discount immediately makes that $1000 capable of purchasing $2000/mo. of goods and services! Nice huh? “But, you say, what about all of the other business models before retail sale, won’t they just increase their prices and we’re back in the same soup?” Yes, they might raise their prices, but in the first place they won’t raise their prices 50% otherwise they’d undoubtedly lose their market share to competitors. And this leads us to the third policy of the new paradigm.
3)A 10% “pass on” discount/rebate for the “retail” product of every business model to the next business model preceding and leading up to the business model of retail sale. This policy will be rigorously accounted for and any inflationary and unjustified price increases despite all of the benefits to enterprise by the new paradigm and its policies (we’ll get into those additional benefits in a bit) will first be taxed at a rate of 110% and if continued will swiftly result in banishment from the discount/rebate policy. And as an incentive to abide by the policy’s requirements of the virtues of thrift and restraint any business model that doesn’t increase or decreases its prices even more than the 10% the monetary authority will gift them with 10% of their net monthly profits. ($100,000 profit/mo. = $110,000)
Okay next part of the solution.
4)A separate publicly administered monetary authority that distributes the money for the policies of the new paradigm of Monetary Gifting. A private monetary authority with a paradigm of Debt Only is corruption and domination waiting to happen and is ethical idiocy. A publicly administered monetary authority is equally problematic….unless its paradigm and policies actually effect individual and commercial freedom and systemic free flowingness. And that paradigm is Monetary Gifting and its specific policies accomplish exactly that.
5)Private credit creation will be ended. Legitimate banking assets and only its legitimate assets will be equitably distributed among its investors. A new Bank of The United States will be established throughout the land to create and disburse all new debt/loans at 0% interest. Private financial services that deal with already created and/or saved money will still be allowed but will be subject to the policies of Monetary Gifting and also be regulated to prevent any possible abuses. Speculation will be severely curtailed and regulated and any attempt to de-stabilize the currency by any individual, group or entity foreign or domestic by shorting or any other scheme will be denied by the Bank of the United States and/or by the government of the United States as a monetary sovereign, and declared null and void.
6)The new public financial system of note creation will be wrapped into and become an extension to retail sale and so will be able to participate in gifting individuals with the discount/rebate policy.
7)The treasury of the United States will fund all governments and programs both state and federal. Thus all state and federal income taxes will become redundant and eliminated. The currency will be legal tender and taxation will be punitive regarding failure to abide by the new paradigm and the new zeitgeist from which it is derived. Grace-Graciousness is benevolent…but simultaneously swiftly and ethically powerful.
8)All transfer taxes paid by individuals and businesses for welfare and unemployment insurance will be immediately eliminated. Social Security taxes will be phased out in a straightforward fashion and medicare/medicaid taxes will also be eliminated as the government of the United States will pay for all state and federal programs and the people will have a referendum on whether they want a single payer type medical and health insurance system or a combination single payer/private health insurance that fully utilizes the discount/rebate policy of the new paradigm and also fully abides by the ethic of the new paradigm.
9)Any cheating and/or attempts to de-stabilize or game the new paradigm and its policies, regulations and agenda will be punishable by first degree felony charges. Taxes will become almost entirely punitive for monetary and economic vices and/or “mortal sins”, and personal, business, systemic and/or charitable virtues will be those most likely encouraged by additional Monetary Gifting.
10)The government will participate in and encourage the creative process of technological, economic and artificial intelligence innovation with monetary gifting with the intention of attaining ecologically sane and sustainable policies.
11)National re-industrialization in the most productive, technologically efficient and ecologically sensitive fashion will be encouraged and immediately begun, and the national infrastructure will be funded and created in the same way.
12)There will be a coordinated effort on the part of the clergy, the helping professions and the government with public service announcements that will counsel and help all citizens become more aware of the multitude of positive and constructive purposes and leisure in addition to employment and so better be acculturated to the new paradigm economy.
Individual and Commercial Benefits
With a $1000/mo. dividend to everyone 18 and older and a 50% discount to retail sale everyone of age will immediately have potentially $2000/mo. of purchasing power or $24,000 per year. If a student going to college got a part time job at $8/hr that would be an additional $160 x 4 or $640/mo. or $1280/mo. of additional potential purchasing power or $3380 total and a yearly potential of $40,560/year. With these policies that would enable a student to pay $12,000/yr of tuition for $3000 (the discount is also in effect in the public national bank note creation) in monthly installments of $250/mo. That leaves $1640 – 250 = $1390. $1000 of rent and utilities reduced to $500 leaves $890, $500/mo of groceries reduced to $250 leaves $640, a $300/mo. car payment and gas reduced to $150 leaves $490 or potentially $980/mo. for dates, snacks and a little bit of white wine…but only on weekends. 🙂 And you get a college education without incurring any debt that would otherwise severely crimp your ability to get on with your life. So think about supporting these policies by helping me make the new paradigm known and getting it implemented. Together we are many and strong, and the number of those beholden to the current financial paradigm are few…and ethically on extremely thin ice.
Businessmen, this is how you will benefit. As mentioned before the elimination of all transfer taxes and income taxes, twice as much potential purchasing power in the hands of your consumers due to a reduction in prices by 50% or more…and yet you get your full best competitive price. Conservatives and libertarians, you get the elimination of the governmental bureaucracies that administer taxation. The economy runs as efficiently as possible and in a continuously stable and prosperous flow. You get private finance off your back and on your side when it comes to borrow. You need to get on this bandwagon and ally yourself with your consumers. Let us put an end to the monopolistically dominating and greedy paradigm of private finance known as Debt Only and establish America “As Ronald Reagan emphasized, America is a shining city upon a hill whose beacon light guides freedom-loving people everywhere.”
“Knock on” Social and Political Benefits
Our country has been on an overly contentious dis-integrative process for over 30 years. This new paradigm and its policies is our last best chance to reverse that tendency and re-integrate and rejuvenate our economy and our entire civilization. Wealth and leisure time will enable us to pursue much more than the purpose of mere economic survival alone with an incredible increase in the arts, sciences and every other positive and constructive purpose that individuals can conceive. This will raise the general emotional tone of every individual and enable them to better experience all of the joys and benefits of self actualizing states like confidence, hope, love and graciousness. These will also enable us to culturally build our moral fiber and be more rational as well, as ethics are the rational consideration of morals, and who can claim that a culture based on graciousness and gifting is unfair or unduly onerous? Civilizations fall if their leadership is not able or willing to resolve their deepest problems and conflicts. Let us unite. We have nothing to lose but the sorrows and enslavement to our conflicts and the eventual loss of our freedoms due to cultural collapse. Help me, let us help each other, to grasp the new paradigm and the Good that it will effect throughout the land.
Our politics will finally be able accomplish the thirdness and oneness that is Wisdom and statesmanship on a continuing basis. Again, paradigm changes are great leaps of progress and union.
How All the Leading Edge Research and Policies Align With, But Do Not Perceive the New Paradigm and So Do Not See How To Unite With It
The Public/State Banking movement is reflective of the National Publicly Administered Bank of the new paradigm. However, it still remains completely within the old paradigm of Debt Only and also does not see that finance is inevitably problematic no matter whether it is public or private…unless guided by the new paradigm of Monetary Gifting and the new zeitgeist-ethic of grace-graciousness.
Steve Keen recognizes that finance capitalism is demand constrained and believes in “a modern debt jubilee” as a one off policy, so he is aligned with and stands looking at Monetary Gifting but still remains unconscious of the new paradigm. He also does not perceive the efficacy and economic and monetary power of the retail discount/rebate policy.
MMTers have the mechanics of fiat money creation down, but they largely if not completely reside within the old paradigm of Debt Only and basically “punt” on the politics of Debt. The stance they take on a job guarantee and employment as “solutions” to our economic problems is entirely old paradigm, and their critique of a universal dividend is also entirely mistaken. Finally, MMTers do not seem to recognize the most significant conclusion of their research which is that if a government is the sovereign creator of the currency….then there is absolutely no need to tax individuals and commercial enterprise….at all. The basic reason why they miss/do not suggest this fact and advocate it as policy goes back to the fact that they are unaware of the significance and power of the discount/rebate policy of Monetary Gifting.
Michael Hudson certainly has the moral fiber and fire in the belly to call private finance parasitical. It’s what I admire about his thinking the most, but he hasn’t quite crossed the line to seeing Monetary Gifting, and again I think that is because he misses the power of the discount/rebate policy.
The Signatures and Effects of Paradigm Change
Conceptual opposition to old paradigm in significant/primary ways
Examples: The paradigm change from Hunting and Gathering to Agriculture was oppositional in that greater abundance and more secure survival was the result of staying in one spot instead of nomadically moving around.
The Helio-Centric cosmological paradigm change resulted in the demise of the oppositional concepts of spiritual egocentrism and to a degree its attending supernaturalism.
The new monetary and economic paradigm of Monetary Gifting is in conceptual opposition to the current financial and monetary paradigm of Debt Only.
Inversion of primacy/position and/or a problematic and significant duality or ratio
Examples: Helio-Centrism was the swapping of the problematic positions of the earth and the sun.
The underlying problem of modern economies: the problematic ratio/duality that the rate of flow of total costs and so prices always exceeds the rate of flow of total individual incomes simultaneously produced is resolved by the new paradigm of Monetary Gifting and its policies, regulations, structural business model changes and basic philosophical concept-ethic-zeitgeist.
A new insight and/or a new invention that enables the formulation of the new paradigm
Agriculture/Animal Husbandry enlightened Hunting and Gathering
The telescope and discovery of the ellipse enlightened Ptolemaic cosmology
The Gutenberg Press enlightened hand written and oral tradition communication
The significance of the stable ending and summing datum in the midst of economic flux/chaos/complexity of the point of retail sale for any and all business models, the recognition of the digital natures of the pricing, monetary, debt and accounting based systems and the realization that retail sale is also the terminal expression point of consumer price inflation enlightens economists that a 50% discount/rebate policy at retail sale expresses the new paradigm and also effectively implements it throughout the entire new pattern of the economy.
New theories are actually only “epicycles”, tweaks, reversions, palliatives or mere reforms that are easily supplanted by vested interests and so never effect or maintain significant change
Keynesianism was a palliative, hence it was easily supplanted by the ideology looking for justification of the neo-liberal synthesis
The Public Banking movement is a palliative reform of the current paradigm of Debt Only and so will easily be gamed and over turned.
Commodity based money systems are obsolete and unworkable/game-able “solutions” that do not address the cost inflationary/demand constrained nature of modern economies
Crypto-currencies are insecurable, surface level distractions from the real problem which is the paradigm of Debt Only and hence will never resolve that real problem
MMT has the mechanics of money creation correct, but mentally resides entirely within the current paradigm, so much so that they fail to recognize their actual biggest insight which is that a sovereign money creating government could simply create and distribute all monies necessary to completely fund government on all levels and so re-distributive taxation is completely unnecessary. They also of course miss the significance of the time, place and monetary policy power of retail sale, i.e. the new paradigm and its policies.
Debt jubilees and any other one-off policies are surface reforms and fail to see the systemic/pattern effects that the new paradigm and its continuing policies effect.
Long term problems of the old paradigm resolved
Monetary scarcity, systemic austerity and chronic inflation are resolved by the new paradigm and its policies
Helio-Centrism resolved the orbital inconsistencies of Ptolemaic Cosmology
Agriculture resolved the relative scarcity of food and vastly increased the survival potential of the species that were held in place by Hunting and Gathering
Obvious progression that once adopted is never reverted. Also every factor in the area the new paradigm applies to adapts to the new paradigm….not the other way around.
Hunting still occurred, but nomadic life basically ended.
Hand written books and oral traditions continued, but the Gutenberg Press and printed information prevailed and further evolved.
Social Security and deposit and unemployment insurance have prevailed against regressive efforts to end them for 80 years, but they are only reforms and thus palliatives. Monetary Gifting is the new paradigm and will usher in the actual solution to the inherent problems of advanced economies…and we’ll never have to worry about regressive interference and wrong headedness again.
…everyone who doesn’t perceive the new monetary and economic paradigm…is a dunce. They may be erudite and completely well intentioned, but until they see the new paradigm, the significances of the new discoveries about the point of retail sale and with historic knowledge of finance and the rise and fall of civilizations logically conclude that the business model of private finance is utterly problematic…they’re just erudite dunces.
You have nothing to lose but the chains of Private Finance That Steal Your Cultural Inheritance
Me: Everyone here is missing the real problem which is the idea/currently enforced paradigm of Debt Only and which has no balancing counterpart despite the rigged, cost inflationary and hence unworkable inherent nature of modern technologically advanced economies. Everyone is mentally paralyzed by the fear of monetary inflation which is a misnomer because money actually isn’t the operative factor in such, and is largely or completely unconscious of the fact that the point of retail sale is the terminal summing of all costs and so all price for any item or service and simultaneously is the terminal and only legitimate ending point for the entire economic/productive process, that is where production becomes consumption. Hence it IS the perfect place to implement the new paradigm of Monetary Gifting with a monetary policy of a discount/rebate that mirrors the digital nature of both the pricing and money systems and so benefits all agents and not only prevents any possibility of inflation (retail sale is also the terminal expression point of price inflation including large asset purchases like autos and mortgages), but integrates price deflation painlessly and beneficially into profit making systems.
Behold! All things are made new!
R: Lending does not create money.
It creates velocity, which is indistinguishable in practice from money.
It satisfies one side of the M x V = P x Q equation.
Anyone that can lend can create velocity.
So everyone can create “money”.
Me: The velocity of money creates liquidity for enterprise with which they must pay their vendors and crediters, but does not increase the purchasing power or incomes of individuals by a single cent as its classical illustration erroneously depicts. This is because any money re-circulating is business revenue NOT anyone’s individual income that can be distributed willy nilly without regard for cost accounting and the necessity for businesses to pay their bills. Macro-economists miss this because they’re off in some three times removed abstract and/or eye glazing over mathematical fugue and hence have lost track of temporal commercial realities.
RR: (Regarding home inflation) Are we still in the sweet zone Dean? Does a despotic demagogue taking us on the path to global conflict (a distinct possibility given the new SOS) figure in anywhere in the bubble analysis?
Me: Yes, all the more urgent that we implement a 50% discount at the point of retail sale (the point of retail sale for a home is the builder so a $200k home would then cost only $100k thus effectively integrating price deflation into the economy. And if we were smart enough and honest enough to confront the fact that private finance is a destabilizing, illegitimate, post retail sale and thus completely parasitical flow of additional costs we could thus make finance a public utility that could be added to retail sale you could reduce that to $50k.
Monetary Gifting is the new paradigm that will save financially dominated profit making systems from its own cost inflationary collapse.
RR: While I commend your idealism Craig I cannot help but note your ideas are impractical and therefore render your enthusiasm useless in solving real-world economic problems. Simply repeating yourself endlessly, dismissing legitimate questions of how one gets from the less than ideal to the ideal in a real world, renders you merely an intellectual parrot. In time no one takes you seriously as you are incapable of thinking outside your own minds “paradigm” long enough to render it practical within the world we find ourselves. Material wealth flows in certain channels and the ability to recognize those channels and work within the pragmatic real-world structures we find ourselves is the only way we incrementally advance towards the ideal—assuming it is a good one and worthy of our striving. Utopian solutions seldom in history have turned out well. It might serve you to consider why that is? No doubt, you will retort I do not understand, as that seems your position of last resort when challenged with the lack of pragmatic specifics of how one advances from the less than ideal to the ideal. Alas we live in a less than ideal world and no matter how much wishful thinking we engage in we must work out our ideals with and among our fellows, and that inevitably means social compromise.
Me: Utopias are not real. However, Wisdom (the integration of opposing truths) is also the best integration of the practical and the ideal. If we can over night create a Federal Reserve that backs finance when it takes leave of its moorings like it did leading up to the GFC, then with an intelligently lead mass movement of self interested constituencies we can just as easily implement a discount rebate policy and a balancing monetary authority to fund it.
There’s nothing impractical about that, and all it really takes is for one to act out the discount/rebate policy in one’s mind or with two other people until one sees how real its effects actually are. Some times lingering orthodoxies and current paradigms die only with repetitive efforts…but when the benefits finally hit you….it’s called the breakthrough AKA paradigm change.
Finally, compromise with a dominant force when a solution is actually available is not only stupid, its completely unethical. Please consider that truth.
Paradigm perception requires a peculiar and particular set of mental tools. They represent the two major forms of human mental inquiry, science and wisdom. Science is a trinity-mentally fragmenting-process and wisdom is a trinity-unity-wholeness-process. Integrated they make paradigm perception possible, and if one has a full historical and conceptual understanding of what a new paradigm is (a single concept that describes and integrates into an entire new pattern) and what it does (radically advances human thinking and survival) ….it makes new paradigm perception a fairly straight forward rational process.
For instance, all of the leading edge reformers have reflective policies regarding money, are aware of the problematic nature of the private business model of finance and agree there are negative effects to monetary austerity. However, they haven’t sufficiently integrated this data to perceive the single concept of the new paradigm. They’ve taken it all apart in numerous and repetitive ways…but they don’t see the whole….because they are habituated to the current paradigm of inquiry (Science Only) and so do not include the essential mental tool of wisdom.
They also do not have a particular breakthrough insight/innovation that will enable the new paradigm to rapidly if not immediately become the temporal reality and which new insight/innovation historically always accompanies a new paradigm. For instance the paradigm change of Hunting and Gathering to Agriculture had the innovations of animal husbandry and cultivation of crops, the Copernican paradigm change of Helio-Centrism had the invention of the telescope and the discovery of the ellipse. In the current monetary and economic paradigm change economists do not perceive the economic relevance, significance and effectiveness of tying monetary policy directly and reciprocally to the point of retail sale. Fully understanding this new insight opens one’s mind to the new paradigm because that policy is the very expression of the new paradigm….itself.
Finally, often, even after a new paradigm is perceived, it is not expressed. Usually this is because one’s image as an expert or as a scientist is in danger if it is expressed. Another of the signatures of a new paradigm is that it is conceptually oppositional to the current paradigm and the old paradigm is simultaneously habituated in the minds of both experts and the general populace. Hence it is easy for the orthodox and/or the non-scholarly vast majority to ridicule any new paradigm and its advocates. Hence few express it. And of course the authorities and purveyors of the old paradigm, especially regarding a new monetary paradigm which is the means of freedom and even of survival, can make one’s very life perilous if their monopolistic power and control is questioned. Therefore, declaring a breaking up of that monopoly could be very dangerous.