RE: [SOCIAL CREDIT] ponzi

Tue, 02 Sep 2003 10:56:19 -0700

Redistribution within the firm comes from switching to a VAT with credits to the paying firm for dependents - which are paid to employees explicitly as part of salary.  This will causes firms to change their salary structures somewhat, but not as much as you would think.  Employee-ownership will do much more to decrease hierarchical inequality.

[EMAIL PROTECTED] wrote:
I assure you, the incomes of the rich are increasing.
Their taxes could be raised in order to pay off the
national debt.
--------------------
[reply] Not in terms of consumer purchasing power.
You are quite mistaken. What is (or was) increasing
are capital gains most of which are unrealized that
have become "collateral" for increasing consumer
loans, especially home mortgages against "equity."
That is what is (or was--the "sharp uptick" in
interest rates over the last month is worrisome)
keeping the economy going. The actual purchasing
power required to fully amortize the increasing debt
does not exist. Because of this, loans in general do
not amortize but can only feed on themselves in
Ponzi-like fashion. This is especially true for the
rich whose income is mostly on paper not in cash. A
much larger percentage of the income of the middle
class is in cash, which makes it much easier to
collect taxes from the middle class.

And why should the national debt be "paid off" rather
than amortized as each specific obligation comes due.
Debt is a useful and necessary tool of finance and
there's no reason it shouldn't be for government too.
Debt itself is not the problem; the problem is the
impossibility of amortizing the debt as demonstrated
through A + B. You go to a restaurant--somebody goes
into debt to somebody. It's inherent to doing
business of even the most basic kind. You pay before
you eat, the restaurant is in debt to you. You pay
after you eat, you are in debt to the restaurant and
the restaurant is in debt to the electric company and
the phone company and the landlord. In a dynamic--
that is to say living economy there's always debt,
which in the broadest sense means nothing more that
contractual obligations that contemplate future
performance. An economy that does not utilize debt
is a very primitive economy indeed. It can hardly be
called human; it would have to be more on the order
of the pre-programmed ants that are the universal
dream of socialists like yourself.

In terms of debt nothing distinguishes government
debt from the private sector except the way it keeps
its books. Normally a firm going into debt is
disbursing more cash than it is receiving yet is
booking a profit. Government books that as
"deficit." It's the difference between accrual and
cash accounting.
--

By government profit, I do mean a surplus - although
profit
--------------------
[reply] It's certainly not the standard term.
--

is the correct term if social services and education
are spun off to faith based organizations and income
redistribution happens within the firm rather than
the society.
--------------------
[reply] Which will happen only if there is one big
firm like in Soviet Russia or North Korea. What
really happens there is that there is very little to
"redistribute" because there is so little that is
produced. But you seem to think it can happen
through the "privatization" of government services
and "workplace democracy." I do not agree.
--

What remains are energy and mineral extraction, land
leases and sales and profits from government research
(which would be licensed rather than given away to
manufacturers). This excess would be distributed.

Michael Bindner
--------------------
[reply] That can happen only in "kind" because the
money isn't there. So back to primitive barter.

Great!




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