Re: [SOCIAL CREDIT] talkfest and nonsense?

[Pat Gunning]

That's much better, Vic.

Victor Bridger wrote:

"Inflation is a rise in the amount of money accompanied by an increase in
prices".
It is possible to have inflation (albeit briefly) with a rise in prices
without an increase in the money supply.
 

I suppose that you realize that these two sentences are contradictory. 
The problem is not so much how one defines terms. That problem is pretty 
easy to overcome. The problem is whether a particular definition is 
useful. It is useful for both of us to distinguish between a general 
increase in prices and an increase in the quantity of money.

It is also possible to have an increase in the money supply without an
increase in prices if prices are reduced by the use of "new money".
 



I must disagree with the assertion that the question of, "deficiency of
purchasing power that has not been satisfactorily defended." It does not
have to be defended although every person who raised opposition to the
Social Credit claim over seventy years ago were answered on their own
grounds. The evidence which is now irrefutable can be seen in the debt
situation. I have been reminded many times that the per centage of debt to
GDP is no worse than it has been in the past. Try telling that to the
poverty stricken, not just in the third world countries but in the mighty
U.S.
 

The fact that debt exists does not demonstrate in any useful way that 
there would be a deficiency of purchasing power. Debt would exist in an 
exchange economy even if there was no production (if all goods were 
created and distributed by God, for example); since some people would 
want their more fishes now and others would prefer more later. The 
latter would borrow from the former. Debt also comes into being when 
financiers finance production. How do you distinguish that debt from the 
debt that is bank created. (Not that I agree that this should be done, 
but is it not necessary according to the compensated prices scheme, to 
choose a percent for the subsidy, or compensated price? If  the percent 
chosen is too high, won't there be an excess of purchasing power? And if 
the percent is too low, won't there still be a deficiency?)

I have always suggested that it would be simple to prove the proposals of
Social Credit wrong. Call up all credit cards, stop banks lending for
consumption and have people live on their current incomes (plus savings) and
not mortgage their future incomes.
 

No doubt this would disrupt things sufficiently to cause a recession or 
depression. But that would not prove a deficiency of purchasing power.

Modern accounting may use statistics particularly in their "creative
accounting" process but as a retired company accountant and company director
and company secterary with  a background of over fifty years (and still
involved) statistics does not enter into correct and proper accounting. To
calculate the discount applicable for the Compensated Price would not be
based on statistics but could be provided on information from the Taxation
Office. Suggestions ahve been made that it would be an enormous task but as
I have said it would require no more than already exists within our taxation
system and probably a lot less.
 

Well, I don't know how one could determine the value of an asset without 
estimating both its future price and the income that the entrepreneur 
expects it to yield without employing data. Data analysis is at least 
partly the province of statistics. Take a look at a modern accounting 
curriculum. Or do you believe that modern accounting, like modern 
economics, is all wrong. Of course this is a side issue.

Information from the tax office? Wouldn't you also need to estimate the 
percent of debt that is inter-consumer debt and and the percent that is 
owed to financiers and savers?

I am not sure what is meant regarding the comment, "I hope that the money
issue has been cleared up. If not, we need to discuss it more fully; since
it appears to be a point of disagreement among the "social creditors". What
is the point of disagreement?
Vic Bridger
 

What I mean concerns the questions posed to Bill. Suppose that he 
supports the view that in the modern U.S. banking system, money creation 
by one bank is ordinarily offset by money destruction by the same bank 
or by other banks unless the Federal Reserve Board deliberately chooses 
to make it otherwise. Then the issue is cleared up. If he argues 
differently, then the issue is not cleared up. In that event, I will 
have to reconsider quite a few of my recent decisions and posts.

--
Pat Gunning, Feng Chia University, Taiwan;
New book: UNDERSTANDING DEMOCRACY 
http://www.constitution.org/pd/gunning/votehtm/cove&buy.htm
Web pages on Praxeological Economics, Democracy, Taiwan, Ludwig von Mises, Austrian
Economics, and my University Classes; 
http://www.constitution.org/pd/gunning/welcome.htm
and
http://knight.fcu.edu.tw/~gunning/welcome.htm

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