You will not get away from that by abolishing interest and trying to concoct some alternative method of financing. You can get away from that by abolishing the system of free enterprise, as the Soviets did--and then you have another bag of worms. You thought you understood the old bag of worms whereas you didn't have the foggiest idea--just ideological delusion. The new bag of worms you will not admit even exist. At some point your "Soviet" utopia must inevitably melt down.
What Douglas was concerned about was the general fall of income relative to the costs of production (concomitant to the displacement of labor) creating the illusion that demand from consumers is falling, whereas the reality is that demand might actually be increasing in the real sense. Sales fall or remain stagnant. Producers and retailers cannot meet their costs of production and go out of business. To fix that you don't abolish a fundamental principle of banking and free enterprise (unless you want to be nitwits like the Soviets were--one of the first things they did was to outlaw interest and profit which became firing squad offenses; they later had to backtrack in the "New Economic Plan"). You send out checks so that financial demand matches real supply. It's as simple as that. ---original message--- I can follow you on this, and the next post, too, Bill. But what happens in the case of default? Or if the bank decides its customer is no longer 'credit-worthy'? Lets suppose I borrow a sum of money, and the interest is based solely on time. I have a slowdown in business, and my profit from which I pay the interest diminishes, or ceases all together. Theoretically, as long as I was making the interest payment there would be no purpose in the bank wanting its principle back. And in this instance, we'll assume they don't. But if my paying that interest, the only expense other than property taxes, [and possibly fire-insurance], based solely on time, draws down my capital when there's insufficient coming in to replace it, pretty soon I'm not going to have enough dough to operate when things pick up. Unless I go back to the bank for another loan, that is. (Which, in the case of a small business, is highly unlikely to be granted.) Over time, particularly in a cyclical industry like ours, an indebted producer slowly finds he's more and more in hock to the bank. And they can, (and do), increasingly have his fate in the palm of their hands. With the result that purely a 'financial' result in the operation of the business has to be aimed for, regardless of anything else. Now as I read Douglas, this was one of the things he was most concerned about. How do we get away from that? Joe ____________________________________________________________ Get advanced SPAM filtering on Webmail or POP Mail ... Get Lycos Mail! http://login.mail.lycos.com/r/referral?aid=27005 ==^================================================================ This email was sent to: [EMAIL PROTECTED] EASY UNSUBSCRIBE click here: http://topica.com/u/?a84IaC.bcVIgP.YXJjaGl2 Or send an email to: [EMAIL PROTECTED] TOPICA - Start your own email discussion group. FREE! http://www.topica.com/partner/tag02/create/index2.html ==^================================================================
