Circular Economic Reality Check for Fiscal Cliff Bulimia

Circular Economic Reality Check for Fiscal Cliff Bulimia

(A Slight Macroeconomic Crash-Course) 

Whoever controls the money supply controls the economy

We determine the nature of such fonts and with it

The ability to manifest wealth from the appearance of wealth  

The functional means of aiding survival become secondary

(Food, wellness, shelter, human-contact) 

The primary component is the extraction of a tithe

Based on harvesting mechanisms built into the machinery

Of the economic system to sculpt out a profit-kernel during

The recirculation of currency  

Where does wealth originate?

Take ten humans on an otherwise deserted island

Who owns the land?  Who owns the fresh-water, the fish, or the bananas?

At one point a portion of the ten staked claim to Earth 

Conflict was resolved via violence, treaty or religious mandate

These resolutions parade into ancestral inheritances

Only to be disrupted by the free will of man and the science of nature

Bearing profit and loss thorough civilized commerce or violence through uprising or war or the natural ache of flood, fire or barren crop 

Yet the gravity in the equation pulls towards monopolization

Whichever one of the ten became the most powerful early on

Is and will be the most likely to hold the preponderance of the resources later

The only anti-gravity is progressive taxation or riotous rebellion  

Let us examine the effects of this magnetism

The economic tide of transferred wealth is required to travel from

Bank financing owner who pays worker who builds or grows good

Back to owner to worker outside of firm who buys good at a price 

This price must allow for a tithe to the owner for his effort

(Let us call this tithe P for profit.)

And a tithe to the collective to sustain the collective of the island

(Let us call this tithe G for government.) 

Tithe G comes in two forms, financial (tax money) and regulatory (laws to sustain industries primarily to internalize economic costs placed on the collective by an industry, which the industry will in every avenue attempt to externalize to gain market advantage, if left under-regulated by the collective.) 

It is advantageous for the fluidity of the economic equation for the totality of these two primary tithes P&G to be minimal in a free economy 

They are counterbalancing, one is check to the other

Tithe G using progressive taxation can extract profits from the owners

An owner can close shop to cease excessive taxation to the government 

But where did the bank get the currency to fund the owner? 

Currency is most likely to be dictated by owners based on

The nature of their resources collected,

For example silver, gold, oil, or fresh-water

The more rare the resource,

The greater the ease to hold power over the remaining nine 

Banks in today’s economy set that resource based on an algorithm

We have defaulted to the reality of a computer program

The State has hijacked the wealth of the unborn and the young

To fund the creation of a federal deficit based on faulty Keynesian economics 

Keynesian economics has two primary manipulative variables to boost the present

Lower tax or interest rates (the tithes) or to increase governmental spending (stimulus).  The risks are: inflation (too much currency in circulation) or

Depression (actual activity is too below potential current capacity) 

Growth expands capacity or under-stimulated segments inside the capacity

The United States and Europe have extracted the natural resources of

Asia, South and Central America and Africa

Through colonization and neo-liberalism for centuries  

The interest these countries pay to the U.S. and Europe through the World Bank and the IMF fundamentally exceeds the aid provided in return.  The beneficiaries of this dynamic are the profit-tithes paid to the multi-national corporations of the U.S. and Europe who construct the infrastructures in these countries.  So in essence, the currency of the World Bank goes to companies like Halliburton not the Iraqi or Nigerian government.  The interest on that infrastructure is paid by the Iraqi and Nigerian people back to the United States and Europe. 

During the Clinton presidency the U.S. first truly defaulted to the algorithm, because the computer technology was possible.  The U.S. funded infrastructure in Southeast Asia in this way and then bailed out the corporations leaving foreign citizens indebted when the economies collapsed. 

In turn, after September 11^th, 2001, America cut taxes and boosted stimulus and avoided inflation by indebting ourselves to Southeast Asia by buying their cheaper goods with their cheaper labor.  They would then buy our bonds.  China kept the value of its currency low.   

This allowed our currency to create a double deficit.  The G tithes in America are low.  (We are not producing what we are buying.  So the currency does not recirculate amongst American workers. Secondly the currency gets trapped overseas inside the P tithes of multinational corporations.)  The U.S. economy is doubly-restrained.  The P tithes are out of control and the economic fluidity of the economies of the U.S. and Europe are consolidated and constipated into the bank accounts of the one man on the island. 

Now domestically, imagine the United States Federal Reserve and a family in Michigan.  Citi Bank borrows money from the Federal Reserve at two percent and lends it to a mortgage holder in Michigan at six percent.  When that loan is backed by taxpayers, where is Citi Bank’s culpability for its business risk it supposedly leverages to obtain its profit-tithe?  It is nil and void.  The housing crisis of 2008 created over decades explodes. 

Furthermore when tithe G is too low on Citi Bank, and tithe P is too high, Citi Bank is allowed to become the behemoth that is too big to fail through consolidation after merger left unmitigated by either governmental regulation by protecting taxpayers through laws to ensure market stability. (the second form of tithe G.) 

Why is Europe in crisis?  Why is the United States not far behind?  The answer is in the fluidity of the economy.  The passage of wealth restricted by multi-national corporations bypassing a single-nation’s G tithe’s the way corporations used to only be able to do in America on a state-by-state basis.   

What we have is a race to the bottom.  If each state lowers their G tithe to absolute minimum, (see Texas as an example.) Yes, corporations will flock to the state over another (see Louisiana as an example.)  Prosperity will ensue for that state, but not the whole of the collective America.  Cost externalities primarily created through the realities of systemic poverty abound in communities when the excessive percentage of P tithes are not shared with workers.   

Workers recirculate currency at an exponentially higher rate than owners, because workers are forced to expend the preponderance of their currency on the functional means of aiding survival (food, wellness, shelter, human-contact),

 

Which as stated earlier become secondary to the primary goal of the owner

(to create wealth from wealth)  [The increase of a stock-price.] 

As a member of the collective, one must ask ourselves, “What are wages?  Are wages to workers good or bad?”  When we assume that higher worker wages only implies the price of a good will increase we are ignoring the interplay inside the P tithe.  “What if the P tithe is not equitably partitioned between owner and worker?  What is reasonable?  Is it fifty-fifty?  Is it eighty-twenty?  How many workers garner kernels of profit thousands of times higher than their workers?” 

So it is up to the G tithe or a revolution of riots amongst the collective to reassert a reasonable balance.  Without it the collective fails; the great recession ensues; the base needs now deemed secondary to our collective go under-met.   

The plague of poverty rises as an externalized cost to the corporations on a global basis.  The resources of food, shelter, and water actually become scarcer due to the miss-prioritization.  Wealth created from wealth based on the algorithm becomes king.   

Until one day the stock market crashes, the house of cards of computer algorithms reveals the naked emperors, debt formulas become non-sustainable, (Look at Greece, look at Spain, now look at Illinois, look at America.) 

Why did this happen?  What can we do to prevent this gravity? 

Do you have a better idea now than before reading this?

If so, let me know.  There is so much more to discuss.  

 

Link to Continue part of the Journey