The banks create money through new loans, thereby inflating the money supply… so why can’t government create new money supply through social credit?

Inflate the money supply by say 5% a year and use it to fund municipalities on a per capita basis, or to eliminate regressive user fees… so that those that earn money get to keep the money they earn, and those that are already retired get a form of indexing to the cost of living as well through protection from taxation inflation.

The rules are bent to far in favor of the old capital in the financial sector, so a form of social credit to fund government would be a way to tip the scales back towards the middle class.

Essentially a 5% tax on capital in all forms through inflation of non debt money supply in the form of social credit.

To hire a decent employee for a basic job a business must already pay more than minimum wage.
The BC fed should realize that many employers already offer more than the minimum wage to attract and retain above average quality workers. By raising the minimum wage a small business will just have to spread the same amount of money to employees. It seems the BC fed only looks at the base number not the greater picture.

Eagleone:- “The banks create money through new loans, thereby inflating the money supply… so why can’t government create new money supply through social credit?”
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It could, Eagle. But not to do what you want it to do in the rest of your post.

All that would happen if the government did as you’re proposing would be a constant rise in the price of all ‘consumables’, and increased never ending bleatings for raises in wages to try to ‘catch up’. Which they never would. And the government then having to either institute rigid economic controls, or tax heavily, or both. (Trudeau, father and son, would just LOVE it!)

What the government could DO, and should DO, is ‘create new money’ debt and interest free to LOWER the price TO CONSUMERS of all consumer goods for sale at the point of final retail.

This is not hard to do, so long as total national production exceeds total national consumption, as is normally always the case.

It would result in the ‘figures’ of finance actually REFLECTING the physical ‘facts’. Which are that the ACTUAL (physical) costs of production of all goods and services we consume are continually FALLING, even though through the flawed way we currently do the accounting as it relates to money itself, they’re more often than not ‘financially’ RISING.

All the greedy whiners will close their doors and move to Alberta.

Should there be a increase in minimum wage, as business owner, I believe that a increase in wages should happen, it is the amount which needs to be dealt with. I do not believe in increasing it 20% overnight. This will definitely start the inflation ball rolling. Do it incremental 25c every 6 months until we hit a target of $12.50.

This may be too slow for some people, but the purpose of the minimum wage jobs is not for people to make a career out of it. Its a wage where a teenager can get started and learn how to work. It is a job for early retired people looking for a bit of extra income over their pensions, just to make ends meet.

As a society, I don’t think we are looking for career min wage workers, this leads to a stagnant economy and socialism. Set the wages, so that it forces the young workers to get better educated to get better jobs.

Another nutbar post from comrad Duhragon.

Any increase in wages has to flow through into prices, raising them, too. In reality, all that happens is everyone gets to work with bigger figures, at least everyone who is directly affected in regards to incomes still earned by labor. “Purchasing power” itself has NOT really increased. Which should be the desired object of the BC Fed, and employers, too, and the government ~ to enable each of us to be able to buy ‘more’ with a given sum of money.

So Socred I think you fail to understand what I was saying.

We can agree that new money is created when banks create a new loan and put it as an asset on their books. We can probably agree that the banker bailout for speculative financing that was known as quantitative easing, essentially central banks creating money through new loans to the banks, was just an extension of bankers creating new money to bail themselves out.

What we don’t agree on is that governments should be allowed to create new money too and use that to insulate society from predator monopoly capitalism?

I will direct you to read Thomas Piketty’s new book ‘Capital in the 21st Century’ to enlighten your thinking, so as to gain a greater understanding of finance and monetary policy and the direction of an oligarchic society that we are morphing into.

He lays out clearly how the monied class of finance has a distinct advantage over the labor class when finance returns on average 5% more than the growth of the actual economy. Meaning that what we see is an ever more concentration of wealth with those at the top that own the capital, concentrating dynastic fortunes at the top and widening the class divide between financial wealth and the middle class working through labor and earning wealth through the productive side of the economy.

My thinking is we don’t need new tax laws, lawyers, accountants, economists, and bureaucracy to solve this problem… they would only work to find innovative ways to hide the power imbalance and further diminish the viability of our democracy through more back doors to power.

What we need is to take the 5% difference in financial wealth over the actual wealth generated in the economy through production and increase the money supply by that amount each year to be redistributed to citizens and local governments. Its debatable if this would create inflation, because essentially the quantitative easing was for in excess of 5% and it didn’t produce inflation, and essentially it is not a cost pressure (like a hike in minimum wage is), but rather a wealth pressure with more wealth to go around.

Sure with 5% inflation of the money supply each year the debt based ponzi of finance would now require at least a 5% return on debt to maintain real income, and so lending costs would rise and homes would be priced at 8% mortgage not 3%, and housing bubbles would be difficult to manufacture, and pensions would then see actual growth on returns… the economy would adjust to a new normalcy that is steady, reliable for investors, and far less prone to the manipulations of the monied class of globalist financiers that loot the world through their access to cheep capital and inherited wealth.

Time Will Tell
Within the next ten years IMO.

Comment Posted by: dow7500 on May 2 2014 10:53 AM
Another nutbar post from comrad Duhragon.
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You’re one to talk Dick Martin!

Eagleone:-“We can agree that new money is created when banks create a new loan and put it as an asset on their books.”
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Absolutely. Their counter ‘liability’ is the deposit they have created in the name of the borrower into which they’ve credited the amount of the loan. This is simply a process of bookkeeping. (The actual ‘asset’ to the bank is the borrower’s Promissory Note ~ his contractual obligation to pay them principal and interest, at or over some time *in the future* in return for a generally acceptable form of financial credit he can use *now*~ the terms of which contract were created “out of nothing”, because they didn’t exist before banker and borrower agreed to them.)

If the borrower subsequently defaults on his loan, the bank is on the hook for any payments he’s made to third parties from that account. It has no recourse to recover anything from them, they’re paid for whatever they’ve sold or provided the borrower. The banks only recourse for collection is with him.
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Eagleone:- “We can probably agree that the banker bailout for speculative financing that was known as quantitative easing, essentially central banks creating money through new loans to the banks, was just an extension of bankers creating new money to bail themselves out.”
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We can, though this is largely irrelevant.
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Eagleone:-“What we don’t agree on is that governments should be allowed to create new money too and use that to insulate society from predator monopoly capitalism?”
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No, what we don’t agree on is the mechanics of how this is done. You have predator monopoly capitalism primarily because the economic system as it is currently constituted is not fully financially ‘self-liquidating’ as production becomes final consumption.

It should be, but it isn’t.

This means, collectively, that ALL business ‘costs’ flowing through into consumer product ‘prices’ at the point of final retail cannot be fully recovered from ‘incomes’, since the collective ‘incomes’ paid to consumer/workers in any given successive cycle of production are only a PART, and generally a declining PART, of those ‘costs’.
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Eagleone:-“What we need is to take the 5% difference in financial wealth over the actual wealth generated in the economy through production and increase the money supply by that amount each year to be redistributed to citizens and local governments. Its debatable if this would create inflation, because essentially the quantitative easing was for in excess of 5% and it didn’t produce inflation, and essentially it is not a cost pressure (like a hike in minimum wage is), but rather a wealth pressure with more wealth to go around.”
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Qualitative easing didn’t produce a rise in inflation because it hasn’t engendered much new borrowing. It simply covered the impossibility of the banks recovering all the money they had previously lent, and allowed them to retain liquidity. Which would have completely dried up otherwise, and put the USA into a worse depression than attended in the 1930’s.
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Eagleone:-“Sure with 5% inflation of the money supply each year the debt based ponzi of finance would now require at least a 5% return on debt to maintain real income, and so lending costs would rise and homes would be priced at 8% mortgage not 3%, and housing bubbles would be difficult to manufacture, and pensions would then see actual growth on returns… the economy would adjust to a new normalcy that is steady, reliable for investors, and far less prone to the manipulations of the monied class of globalist financiers that loot the world through their access to cheep capital and inherited wealth.”
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No, it would not. What you’re calling for really would be as ineffective as raising the BC minimum wage to $ 13. The benefits, if any, are largely illusory and highly transitory, and it wouldn’t be long after $ 13 was gained that there’d be another call to raise it still further.

The best a recipient of such a wage, or any wage, could hope for would be to squeeze some more payments out of a pay-cheque that’s still, on average, over-committed already. He or she will only end up deeper than ever in debt. And so will businesses, and the government.

Not even the banks will benefit, in actuality, if their purpose is to actually provide the public with financial services, (which is debatable), because their own interest earnings, though increasing, will still be losing purchasing power in terms of what they’ll actually BUY.

(If their purpose is something else, say the further centralisation of power into greater monopolies, and eventually into a One World Government with a financial elite running it, such increases in wages in any manner that decreases the actual ‘purchasing power’ of same, and drives the recipient further into debt just to live, is the perfect vehicle for accomplishing such an end.)

Raising the minimum wage to $13 per hour would have the direct effect of lowering the highest child poverty rate in Canada.

Someone listed the price of a McDonalds hamburger, Big Mac and something less on the menu in a country that had a minimum wage of $15 per hour, same prices, if not lower than ours.

Too much theory not enough substantiated facts socredible. Oh and just ignore that incessant barking between our comments and around our ankles, we know who that will be.

Socred you seem to be making the erroneous assumption that if a person earns more income they will just go further into debt and set off a debt death spiral. I don’t find it a convincing argument. That and furthermore the very notion of social credit, which is money supply created free of debt, is not something that would contribute to a debt death spiral.

Money supply is in perpetual growth. This growth if it outpaces actual production has the effect over time of devaluing the existing monetary unit of measure. Growth in labor income should translate into more consumer demand liquidated with actual production, so growth in labor income is not the problem.

The problem I think we can agree is the ‘interest income’ in finance that is in surplus of actual production (eg look at share of Twitter for a real asset ponzi in finance). Finance in surplus of production income akin to the nominal and real returns on investments. So banks already deal with this loss of purchasing power over time and they cover for it with higher interest rates than their loss of purchasing power.

A social credit of say 5% of the money supply would be the most efficient and fair form of redistribution from monopolistic finance back to the general economy; and part of the cost would be that it implies a perpetual long term steady level of inflation.

I think having a steady level of inflation and a functioning democracy with a healthy free enterprise middle class is a better future than an oligarchic society with a globalized corpocracy determining which citizens have rights. Do we even need banks as we now know them in the future… that in and of itself is a debate worth having.