[GJM] #831, On Closing the "gap" between "prices" and "purchasing power."

[wesburt at juno.com]

Hi Folks,
Burton S. Blumert is worried about Dr. Ron Paul's 
future prospects, now that contributions to Lew
Rockwell.com are no longer tax deductible.  Not to 
worry!  Many of us have been working, pro bono, 
since 1969 or longer, to see someone like 
Dr. Paul restore the equal sign at the top of attached 
Figure 12n, after rising on the wings of Libertarian 
Principles.  Today, I happened on the 2004 message 
below which explores our present condition as well 
as anything I could write today.  

Kind regards,

Wes Burt

----- Forwarded Message From -----
http://copsewood.net/pipermail/ccmj/2004-December/000266.html

From: wesburt at juno.com
To: Discussion at globaljusticemovement.net, 
mai-not at globalproblematique.net,
prompt at copsewood.net
Cc: Wesburt at juno.com
Date: Sat, 18 Dec 2004 19:00:07 -0500
Subject: Priest, Ryan, Legum, Everingham, Gelles and 
Daastoel On Closing the "gap" between "prices" and 
"purchasing power."

Happy holidays everyone,
Please find below brief excerpts from recent posts 
on closing the "gap" between "prices" and 
"purchasing power" by six  "true believers" in 
Samuelson's Final Law:

        "There are no rules concerning the proper
        role of government that can be established 
        by a priori reasoning."
(Page 1423, Vol. II, The collected Scientific Papers 
Of Paul A. Samuelson)

The recent dust up about a paper on free trade 
and comparative advantage by Paul A. Samuelson, 
now in his eighty ninth year, in the Journal of 
Economic Perspectives (JEP) called to mind a 
story that made the rounds in Boston when I was 
taking my one and only course in economics.  
The story goes, that after being denied tenure 
at Harvard, Mr. Samuelson applied at MIT and was 
made an offer he could not refuse:
        Join the faculty at the "trade school" and write
         the book on neoclassical economics, or continue 
        as you are, an unemployed classical economist.

Neoclassical economics, as we all know, covers 
everything discovered by Smith, Malthus, Ricardo, 
and Paine plus everything else discovered to date.  
Only the proper functions of government were 
omitted.  The proper functions of government in 
a great nation, being so much like the proper 
functions of management in a great corporation, 
as Adam Smith observed in his "First Maxim of 
Taxation," could not be included in neoclassical 
economics because by 1776, the proper functions 
of both management and government, "like the 
secrets of the temple," had become securely 
hidden as the proprietary secrets of the merchant 
class.  God help anyone who disclosed those 
secrets to the public.  To prevent disclosure of 
the secrets, no written constitution was allowed 
in England.  The agrarian colonies in North America 
did produce a written constitution with a Bill of Rights.  
But those functions of government which are essential 
to promoting the general welfare are missing from the 
US Constitution, missing from the United Nations 
Charter, and apparently beyond the vision of today's 
crop of constitution writers, monetary reformers, 
and cranks on the Internet.  

Samuelson made the right choice.  It would have 
been a shame to allow a mind like his to be
unemployed.  And he redeemed himself in each 
edition of ECONOMICS since 1948 by regularly 
reminding his readers of the carefully obfuscated 
technical requirements for achieving maximum 
efficiency, full employment, and perfect competition 
in a free market.  He remained a classical economist 
at heart and an "Economic Hit Man" like John 
Perkins in his day job.  

To see those technical requirements spelled out 
in four letter Anglo-Saxon words one must study 
Melchizedek in the commentary of the late Chief 
Rabbi of the British Empire, Dr. J. H. Hertz, or a 
little later, study Moses and the three tithes in the 
Book of Numbers, or after that, study Plato and 
his REPUBLIC in the original Greek.  Translations 
of Plato by members of Oxford have the 
government raising the nation's children, but 
we know better than that.  

In modern times, Thomas Paine, Louis Blanc,  
Henry Carter Adams, Pope Leo X III, Bertrand 
Russell and many other friends of humanity 
spelled out the "family wage" which uses a 
disbursement from the public revenue to 
complement the market wages of a parenting 
family.  In this way the government would 
replenish the work force by bringing new workers 
into production "debt free," and with constant or 
"decreasing returns to scale," just as successful 
corporations replenish their product lines by 
bringing new products into production.

As you all must know by now, each of the six 
writers below is my academic and intellectual 
superior by an order of magnitude.  Each one 
of them understands perfectly "The Optimum 
policy" (TOP) as illustrated on Dr. W. Curtiss 
Priest's web site in the signature below and 
described since 1969 in my numerous posts.  
The subject is so simple, as John K. Galbraith 
said of banks creating money, "that the mind 
is repelled."  

Of the six excerpts below, the one by Bill Ryan 
and the one by Arno are closest to my heart's 
desire.  We should have started to share the 
secrets of industrialization with all nations 
after Lincoln was shot, as Bill proposes now 
in the second excerpt.  And our present condition 
is the result of a moral defect of omission, not 
some flaw in our monetary system, as Arno 
says in the sixth excerpt.  If I may again lean on 
Samuelson for eloquence:

        "If you don't remember anything of what I say, 
        let this be the last thing you forget:"

The only interest free, debt free, and dependable source of 
a public revenue is a flat tax on all income like the 
first and second Mosaic tithes.

As You may recall, the third tithe was to be 
consumed by the family at the feasts and shared 
with the poor, a form of community building.  If I 
am lucky enough to live to 89, like Samuelson, I 
may have eight more years to pound this message 
home and put the US taxpayer where Swiss 
taxpayers were in the 1890s and where Euro 
taxpayers arrived in the 1970s.  The US status 
quo cannot be sustained.  

Either George W. Bush shows us the new 
paradigm or the Euros and the Asians will 
lead us into the future.  We are "free To Choose," 
whether to go hard or easy.

Kind regards,
Wes Burt
~~~~~~~~~~ Begin excerpt # 1 ~~~~~~~~~~~~
From: Curtiss Priest <bmslib at mit.edu>
To: cyber-soc at topica.com, "List,
Discussion Forum for Global Justice"
<Discussion at globaljusticemovement.net>,
"List, Debt" <Debt at topica.com>, "list,
Federal-Debts" <federal-debts at topica.com>
Cc: Robert Ashford <rhashford at aol.com>
Date: Wed, 08 Dec 2004 18:49:02 -0500
Subject: Re: Capitalism and cycles [was Binary 
Economics and Religion]

~~~~~ Snip to last paragraph ~~~~
What I see are two inovative ways by which 
workers can continue to purchase, without 
incurring debt, with ever increasing productivity.

In the Social Credit model, we would need to tax 
the owners of capital, to give the dividend that 
enables workers to buy all goods and services.

In the Binary Economic model, we would need 
to provide AESOP-like (Kelso) means by which 
workers actually own the capital of production, 
and so they automatically are made richer by 
increased productivity, and so can purchase 
all goods and services.

In contrast, we currently have a capitalistic yo-yo.  
Over time consumers (and other sectors) gradually 
purchase on borrowed funds.  At some point in 
time, the Day of Reckoning comes when debts are 
called, and an inward spiral is created where there 
are massive layoffs and the total inability for anyone 
to pay off any debts.

We call this a depression.  And, indeed, banks stop
lending, capital formation declines, and a sizable
portion of the population become unemployed.

Then, slowly, or sometimes more quickly, everyone
settles, there are many losers, few benefactors, and
gradually the cycle begins again.  And, within the
memories of those who went through a depression, 
there is the tendency to seldom borrow beyond 
one's means, as the pain of the result of that is 
burned into the minds of everyone who went 
through the depression.

~~~~~~~~~~~ Begin excerpt # 2 ~~~~~~~~~~~~
From: william_b_ryan at yahoo.com
To: socialcredit at elistas.com
Date: Mon, 13 Dec 2004 11:26:45 -0800 (PST)
Subject: [socialcredit] social credit in one nation
~~~~~ Snip to last paragraph ~~~~

The long-term solution is to implement Social Credit 
(whatever the accounting adjustment is called) 
throughout the world.  Once the "gap" between 
"prices" and "purchasing power" has been closed in 
the economies of the world, the irrational 
"imperative to export" will have been eliminated.  
Trade between nations will more naturally emphasize 
their respective comparative advantages.

~~~~~~~~~~~ Begin excerpt # 3 ~~~~~~~~~~~~
----- Forwarded Message -----
From: "SANE" <sane at sane.org.za>
To: "SANE Views List" <sane-views at sane.org.za>
Date: Tue, 14 Dec 2004 15:59:03 +0200
Subject: [SANE Views Vol.4, No.17] Closing the 
Rich/Poor Gap is a Necessity not an Option


‘I boil water, and hope the children fall asleep 
before they know there is no food in the water.’  
Suppertime in the Transkei home of a grandmother, 
whose pension supports a small tribe. When 
grandma dies God help those children – and their 
‘scrounging’ relatives if they continue  to collect 
that life-saving pension for a month or two. 
Meanwhile a R15 million house changes hands 
in Constantia or Sandton with the assistance 
of tax lawyers skilled at minimizing tax.

~~~~~ Snip to last paragraph ~~~~

What can we do about it?  We can examine 
every act of policy for its effect on the 
distribution of income.  Every time we subsidize 
something that will further enrich the wealthy we 
should reject it in favour of one that puts money 
into the hands of poor people and poor areas. 
That objective immediately implies a list of policy 
priorities.  Subsidies for renewable energy research 
and employment, rather than for fossil fuels.  
Progressive taxation. Above all, the most obvious 
solution. A Basic Income Grant.

This article and all other issues of SANE Views 
is available 
from http://www.sane.org.za/docs/views/index.htmWeb site:
http://www.sane.org.za

~~~~~~~~~~~ Begin excerpt # 4 ~~~~~~~~~~~~

--------- Forwarded message ----------
From: Doug Everingham <dnevrghm at powerup.com.au>
To: ERANet at yahoogroups.com
Date: Thu, 16 Dec 2004 15:37:04 +1000
Subject: Re: [ERANet] Useable educational material

Relayed by Doug Everingham with  **DE:  comments 
inserted.  I've extended the concept of the "money 
doggerel" summary in case someone else wants 
that approach. At the end I copy the original 'bank 
ballad' as amended by Julian and an extended 
version that takes in ideas from Alan Kerns.

~~~~~ Snip to last paragraph ~~~~

Mints coin some money,
but bank rules are funny --
they authorize credit at will:
with interest compounding
their profits abounding
exceed the cash left in their till.
Our governments have learned
when banks' fingers get burned
by recklessly funding the rich
it's the public who'll pay
in our capitalist way,
& our taxpayers land in the ditch.
An umbrella, they say,
on a bright sunny day
the banks offer farmers & shops.
Till a crisis arrives
such a borrower thrives,
but with cyclones the charity stops
If the battler dips out
thru a flood or a drought,
be assured, bank investors, you'll win
Banking's fire-sale skills
any court battle kills,
and a new mug will bid to begin.
So let's persuade folk
before we go broke
that we should learn of banking at school.
and that money's a need,
not for banksters and greed,
but a stable society's tool --
fairly gathered and stored,
to be used, not to hoard,
to give equity, not to expand;
renouncing the trend
to let it extend
like a weed overgrowing the land.

~~~~~~~~~~~ Begin excerpt # 5 ~~~~~~~~~~~~
From: John Gelles <indexed-savings at sbcglobal.net>
To: Discussion Forum for Global Justice
<Discussion at globaljusticemovement.net>
Cc: Cyberspace Society <cyber-soc at topica.com>
Date: Thu, 16 Dec 2004 03:02:38 -0800
Subject: Interest-Debt-or-Tax-Free Systems Not 
on the Radar
~~~~~ Snip to last paragraph ~~~~

        The IF crowd will tell you to only pay back 
        principal. The DF crowd will tell you to only 
        pay the tax on your gift. The TF crowd will tell 
        you it's all yours for free and fun. The LETS 
        crowd will tell you, you only owe something 
        in return. 

        They will all tell you to buy their book and live 
        forever !

John Gelles

~~~~~~~~~~~~~~ Begin excerpt # 6 ~~~~~~~~~~~~

From: Arno Mong Daastoel <arno at daastol.com>
To: WorldCity at topica.com
Date: Thu, 16 Dec 2004 09:32:33 +0100
Subject: [WrldCty] Fw: A NEW ILLUSION: a question 
of culture
~~~~~ Snip to last paragraph ~~~~

Fourth, I see no sign of such change in policy. 
But slowly the US economists are starting to 
get the right diagnosis, Then they may see 
the medicine they need to take.

Conclusion, the main defect in the US is 
cultural (the same goes for Europe).  This 
will take time to remedy. In the meantime 
things don't look so good for the US (nor 
for Europe).

Arno 

~~~~~~~~~~ End six excerpts ~~~~~~~~~~

     The Optimum Policy (TOP) is shown at
<http://www.epie.org/cyber-soc/default.htm>
   and discussed on list <TOP at topica.com>.
            Please join in the discussion.
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