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Social Credit Economics - Infrastructure

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It came up in recent threads about what the government should do about social/council housing. One route is the current path of paying private landlords to house people. The social credit path is to use the money that would have gone to private landlords to pay the financing costs on building public housing. So say a council needs 100,000 council houses. These can be built in standardized, mass developments. The development contracts awarded to private developers. And then when completed the maintenace contracts given to private building maintenance contractors.

That is a big difference between social credit and socialism. In social credit the government ends up with the equity for public infrastructure. But all the work involved is done by private corporations in a competitive market. Same with the long term maintenance and refurbishment contracts.

For argument's sake the 100,000 council homes have 25 year loans, and at the end of the 25 years the loans are paid off. The council then owns the homes outright. If you say each house is worth £120,000, then at the end of the 25 years the equity the council holds is 12.5 billion pounds. In modern Britain where increasingly private landlords are chosen, at the end of 25 years the private landowners would have paid off their own loans and hold the equity of 12.5 billion pounds.

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The same example has happened in electricity. With a public utility it expands the grid awarding contracts to great international companies who are involved in building power plants. Like GE, Areva and Siemens. Those companies then build the plants and in turn use their own contractors for things like turbines, piping, excavation etc. And are usually awarded the contracts to operate the plants they have constructed.

Again loans are taken out and paid off in time by the rate payers. At the end of the 25 year loans, the power plants are owned outright. A modern nuclear reactor like the French ones last 60-80 years before they need a refurbishment. The same thinking is involved in the construction of substations, transmission lines and so on. Through this a government can develop serious equity over time, without needing the expertise to operate each area on a world competitive level.

In Britain we have switched from public ownership of these things, increasingly to private ownership. So the equity buildup is happening on private balance sheets.

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Isn't that just a very long winded way of saying, "Let's build council houses."

Pretty much, but I think it needs that length to show the equity side of the equation. Plus the anti-council housing lobby in Britain is arguing its right to privatize the gains of the money paid out for council housing, AND right to socialize the costs of paying for council housing.

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  • 419 Brexit, House prices and Summer 2020

    1. 1. Including the effects Brexit, where do you think average UK house prices will be relative to now in June 2020?

      • down 5% +
      • down 2.5%
      • Even
      • up 2.5%
      • up 5%

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