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GDS

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  1. And in an age where increasing leisure should be the inevitable result of automation and constant technological innovation there's absolutely no reason (apart from the laws of debt-finance) why everybody shouldn't have enough money to fulfil those basic needs while working far fewer hours. No reason, either, why work should be equated with paid employment. See this address delivered by CH Douglas at the City Hall in Neewcastle, as long ago as 1937: http://douglassocialcredit.com/resources/tsc/2008_spring.pdf
  2. Redistribution is not the only way. The problem with the minimum wage is not the resulting inequality of incomes, but the fact that it usually has to be subsidised by state benefits, and/or by both partners in a family working full-time, if a reasonable standard of living is to be enjoyed. If the nation’s money supply were created by an accountable public authority, and distributed as a non-means-tested basic income (or national dividend) to all adult citizens, it would provide a platform which would make a decent standard of living for families on the minimum wage possible without resorting to benefits; and part-time work, job-sharing and one-wage-packet families might become the norm. More automation equals fewer jobs - and even some of the people who think themselves safe are going to find their livelihoods threatened, as companies rely less and less on what they call “human resources” (not human beings, you notice) - so if enough purchasing power is to be distributed to keep firms in business, it will have to come, in part at least, from somewhere other than the wage packet. More unemployed people dependent on means-tested state assistance, or working in state-created non-jobs, and resented by those still paying taxes in full? Or the same allowance of publicly-created, non-taxable debt-free money for all, enabling those with fewer skills/less intelligence the chance to accept low-paid work and still have a decent standard of living, while taking nothing extra from those fortunate enough to have well-paid jobs? See http://www.freewebs.com/whosemoney Of course, a universal basic income is out of the question, as long as the money supply is created as a debt owed to the banking system, and the nation has nothing but the publicly-created cash component (now a mere 3% of the total money stock) to call its own.
  3. Redistribution is not the only way. The problem with the minimum wage is not the resulting inequality of incomes, but the fact that it usually has to be subsidised by state benefits, and/or by both partners in a family working full-time, if a reasonable standard of living is to be enjoyed. If the nation’s money supply were created by an accountable public authority, and distributed as a non-means-tested basic income (or national dividend) to all adult citizens, it would provide a platform which would make a decent standard of living for families on the minimum wage possible without resorting to benefits; and part-time work, job-sharing and one-wage-packet families might become the norm. More automation equals fewer jobs - and even some of the people who think themselves safe are going to find their livelihoods threatened, as companies rely less and less on what they call “human resources” (not human beings, you notice) - so if enough purchasing power is to be distributed to keep firms in business, it will have to come, in part at least, from somewhere other than the wage packet. More unemployed people dependent on means-tested state assistance, or working in state-created non-jobs, and resented by those still paying taxes in full? Or the same allowance of publicly-created, non-taxable debt-free money for all, enabling those with fewer skills/less intelligence the chance to accept low-paid work and still have a decent standard of living, while taking nothing extra from those fortunate enough to have well-paid jobs? See http://www.freewebs.com/whosemoney Of course, a universal basic income is out of the question, as long as the money supply is created as a debt owed to the banking system, and the nation has nothing but the publicly-created cash component (now a mere 3% of the total money stock) to call its own.
  4. But why should two people now have to work full-time to pay the bills, when one wage packet used to be enough? In the fifties and sixties we were told that the problem was going to be too much leisure. Instead, we see young couples farming out their six-month-old babies to nurseries, so that they can work for money, instead of looking after them themselves. Some (in interesting jobs) may like this, but a lot of them certainly don't. Why hasn't automation led to people working half the time, rather than twice as long, for the same wages? (See The Application of Engineering Methods to Finance, and Unhitching Wages from Incomes in an Age of Automation, here: http://www.freewebs.com/whosemoney/articles.htm
  5. Yes, it does, you are absolutely right. When bank loans are repaid, money is destroyed. When loans are taken out, new money is created. Bankers themselves state clearly that this is the case - eg: 1) Reginald McKenna, a past Chairman of the Midland Bank: "I am afraid the ordinary citizen will not like to be told that the banks can, and do, create and destroy money. The amount of finance in existence varies only with the action of the banks in increasing or decreasing deposits and bank purchases. We know how this is effected. Every loan, overdraft, or bank purchase creates a deposit, and every repayment of a loan, overdraft, or bank sale destroys a deposit." 2) Robert Hemphill, Credit Manager of Federal Reserve Bank, Atlanta: "We are completely dependent on the commercial Banks. Someone has to borrow every dollar we have in circulation, cash or credit. If the Banks create ample synthetic money we are prosperous; if not, we starve. We are absolutely without a permanent money system. When one gets a complete grasp of the picture, the tragic absurdity of our hopeless position is almost incredible, but there it is. It is the most important subject intelligent persons can investigate and reflect upon. It is so important that our present civilization may collapse unless it becomes widely understood and the defects remedied very soon." This is the first time in history that our entire money supply has consisted of debt. The traditional ratio was more like half publicly-created, debt-free money (ie, money which was not owed to the banks at source) in the form of notes and coins, and half bank-created debt-money. It is now 97% bank-created debt-money to 3% publicly-created, debt-free notes and coins - but since more money is owed than actually exists (£2,062.9 bn of lending to UK residents, as opposed to £1,640.8 bn in deposits - BoE Statistical Release, Third Quarter, 2007), every single penny in circulation is at this moment owed by somebody, somewhere to the banking system. If, owing to a credit crunch, less money is borrowed than is paid back (or written off as a bad debt) the money supply will shrink, leading to a recession. It is this dependence of the entire economy on the ability of people to borrow, and of the banks to lend, which causes repeated booms and busts. The fact that the banks can choose who shall or shall not be lent money, and for what purpose, also dictates the direction of the economy. Recently they have created money mainly for speculative purposes, distorting the property market and other asset prices in the process. http://www.freewebs.com/whosemoney
  6. Accepting non-cash money as if it were legal tender doesn’t necessarily mean people believe that “real cash is being moved about somewhere in the background". When cash amounts to only 3% of the total money supply, and non-cash money is universally accepted in payment of bills and taxes, it's natural to assume that the government considers bank credit to be on a par with notes and coins (as, in practice, it is). To clarify the situation, perhaps it's time to amend the Bank Charter Act of 1844, raising credit to the status of legal tender, to be issued, like notes and coins, only by the Bank of England. After all, the original intention of this Act was to restore public control over the nation's money supply. At the very least, we should return to the balance of around 50% debt-free money which has traditionally been the norm. At present, with more money owed than exists to pay off all the exponentially increasing debt, we have entered completely unknown territory. http://www.freewebs.com/whosemoney
  7. And, in fact, chaos would ensue if they didn't. It would be impossible for everyone to pay their bills, if they had to use cash, since this now accounts for only 3% of the money supply. So I think you could say that bank credit is effectively, if not statutorily, legal tender. It certainly has a much better chance of being accepted in payment of taxes than IOUs from second-hand book sellers - which was the point I was making. I will be more precise in future, but I was looking at the matter from a practical, rather than a theoretical point of view - and, in practice, bank credit is accepted as if it were legal tender.
  8. Sorry I don't see what you're getting at. I didn't say that banks created cash (if cash is what you mean by "currency"). The point I was making was that we can borrow and lend as much as we like among ourselves, agreeing our own terms with our creditors. We might even be able to persuade them to accept goods or services, rather than money, in settlement of our debts. But we cannot reach this kind of agreement with the taxman, who demands payment in legal tender (pounds and pence), whether this comes in cash (government-created) or non-cash (bank-created) form. This puts the banks in a privileged position, as private, profit-making businesses enjoying a monopoly over the creation of non-cash money generally accepted as legal tender. To sum up: this country's legal tender is pounds and pence. whether in cash or non-cash form, since either is accepted in payment of debts and taxes - ie, it would be illegal to refuse payment in pounds and pence, whether this payment came in the form of hard cash, or of a cheque, or as electronic money.
  9. Right - and environmental pollution and waste of resources, if not climate change, tie in with our economic activities because of the way our money supply comes into existence. Virtually our entire means of exchange now has to be created by the banking system, in the form of a continuous succession of interest-bearing loans, so the economy must always be expanding. Without that exponential growth, the purchasing power on which firms depend for survival would shrink. Nowadays most companies have to borrow in order to invest. The cost of servicing these loans pushes up the price of goods, fuelling inflation. (In a cut-throat business environment, price rises may be contained for some time by, eg, using cheap overseas labour, or through further borrowing; but sooner or later costs have to be met.) Since this means inflation is a built-in factor of our economic system, more and more money is needed just to keep level-pedalling. In fact, under the debt money system, excess goods and services now have to be produced merely in order to keep as many people as possible in full-time employment, so that sufficient money can be put into circulation in the form of wages to avoid a recession. In an age of automation, this is ridiculous. Unlike the goods and services on which we depend for a decent standard of living, money has no intrinsic value. It could be produced by a public authority in quantities sufficient for the satisfactory exchange of all goods and services available, with appropriate amounts taxed back out of circulation if there were any threat of inflation. Instead, just to keep the money-go-round going, we've reached the point where less and less of the work people are paid to do is actually necessary. In fact, if they could afford to work part-time or job-share, they’d often be far more usefully employed looking after their families, or volunteering to help in the community, unpaid - or even just keeping themselves fit and taking up interesting hobbies. If you want a stable economic system that actually serves the needs of human beings, rather than a dysfunctional one that can only survive by gobbling up the earth’s resources, spreading pollution, and turning people into wage slaves at a time when much of the necessary work could be done by machines and computers, the best idea would be to stop trying to make climate change an article of universal faith, and start demanding publicly-created, debt-free money, distributed as a non-means-tested national dividend to all adult citizens. Most people, whether or not they believe in man-made global warming, would go along with that, since it wouldn't only take the pressure off the environment, it would mean a better quality of life for them and their families. http://www.freewebs.com/whosemoney
  10. What you're describing is a private arrangement between individuals, without any participation by the state. Try paying your taxes on credit. I don’t think the taxman would take you up on the offer. You can do all sorts of trade and bartering and lending - but, apart from the proportionately very small number of notes and coins in circulation (which are created by the government, and sold on to the banks at a profit to the nation) all the rest of our legal tender (ie, around 97% of it) is created as a debt owed to the banking system: and legal tender is the only thing that's accepted by national government and councils in payment of taxes. So the position of a private trader in second-hand books is very different from that of the banks, which exercise a virtual monopoly (sanctioned by the government, without obtaining the consent of the electorate) on the creation of legal tender. Private individuals cannot legally create the wherewithal to pay their taxes, even if they have ample wealth to back it (it's called forgery, if we do). http://www.freewebs.com/whosemoney.
  11. It may not even be worth arguing about fractional reserve banking anyway, as many people are claiming that it’s already a thing of the past. For instance, the Italian lawyer, Marco Della Luna - the author of “Euroschiavi” (“Euroslaves”), which has already reached its third edition, and who is involved in setting up a system of complementary currencies in towns throughout Italy - says, “ … one major function of the contorted Basle II Regulations is to create a fog of confusion, to hide the fact that the fractional reserve system has come to an end, and that credit, liquidity, is now created without the least backing in hard currency or any other medium.” http://www.freewebs.com/whosemoney.
  12. There's this article from the New York Times of 25 December, 2005: TAKE IT FROM JAPAN: BUBBLES HURT … Mr Nakashima, a Tokyo city government employee who was then 36, took out a loan for almost the entire $400,000 price of a cramped four-bedroom apartment. With property values rising at double-digit rates, he would easily earn back the loan and then some when he decided to sell. Or so he thought. Not long after he bought the apartment, Japan's property market collapsed. Today, the apartment is worth half what he paid. He said he would like to move closer to the city but cannot: the sale price would not cover the $300,000 he still owes the bank. http://www.nytimes.com/2005/12/25/business...;pagewanted=all
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