Re: beyond interest rates

["William B. Ryan" <william_b_ryan@xxxxxxxxxx>]

"If the BoJ repaid 30 per cent of all household and corporate debts outstanding..."
----------

You can't simply repay a portion, say 30 per cent, of all debt, for that
would reward imprudence and distort the structure of production.  What
you can do in principle is distribute the equivalent to 30 per cent of
all debt in purchasing power to consumers and retailers, which will preserve
the sovereignty of consumers in determining what and how much is ultimately
produced.

The supplement of purchasing power must be continuous because the dissymmetry
between costs and incomes is permanent, representing two dynamic factors:
 1. The increasing disinclination to spend (and thereby consume in real
terms) from income with increasing income; and 2. Falling incomes in
terms of purchasing power (in relation to the costs of production) distributed
to final consumers concomitant to the lengthening in the period of production.

In effect, the supplement is nothing more than a macro-economic accounting
adjustment.

I am reminded of Douglas' prediction that it will be the bankers who
will implement Social Credit.

--
William B. Ryan
william_b_ryan@xxxxxxxxxx - email
voicemail/fax - 1-866-678-3967 - toll free



---- Keith Wilde <kwilde@xxxxxxxxxxxx> wrote:
>
> Thank you.  Very interesting, indeed.
>
> At 11:07 AM 09/25/2002 -0500, you wrote:
> >The following is from Eric Lonergan in the Financial Times, September
> >9, 2002:
> >
> >"A consensus is starting to emerge that the most direct monetary solution
> >to Japan's problems would be for the BoJ to finance private sector
> debt
> >repayment. If the BoJ repaid 30 per cent of all household and corporate
> >debts outstanding, financed by monetary base expansion, there would
> be
> >a recovery in domestic demand..."
> >
> >Lonergan adds:
> >
> >"Equivalently, and perhaps more equitably, the BoJ could simply post
> >a cheque for the Yen equivalent of, say, $10,000 to every household.
> >If this has little impact, they could send another one."
> >----------
> >
> >This is one-half of the Social Credit solution.  Simply giving people
> >money does not mean that they will spend it - the old story of pushing
> >on a string - which is why Douglas always insisted that dividends
> must
> >be coupled with a program of retail discounts paid directly to retailers
> >to enable them to pay their creditors, thereby canceling debt.
> >
> >The full text of Lonergan's article is attached.
> >
> >
> >--
> >William B. Ryan
> >william_b_ryan@xxxxxxxxxx - email
> >voicemail/fax - 1-866-678-3967 - toll free
> >
> >
> >Attachment Converted: "D:\Program Files\eudora\Attach\lonergan-09-09-02.pdf"
> >
> Keith Wilde
> Canada Pension Plan
> Ottawa
> kwilde@xxxxxxxxxxxx
> 613 990-8125
>
>