Tuesday, January 22, 2002



[PFMPE] Question From India: Retirement and investment under perfected economy.


Please clarify how people who depend on earnings from the interest on their investments will be able to manage under LETS or Community Currencies or Mutual Credit systems because in these systems there is no provision of interest income. Particularly the disabled or the retired people and senior citizens.


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The question of how to resolve the seeming losses to be suffered if we are to be deprived of ostensible interest income derived from each other within a system itself the subject of usury, arises somewhat ironically from the contemporary, accepted practice of "investing" so as earnings are ostensibly protected from that system — a system which uniformly depreciates the value of money by subjecting the entire system to interest.



Because the interest applied to the entire system deprives the subjects of the system of an ever more substantial degree of the wealth they produce, in truth it is impossible to distribute what remains of their production to their overall advantage. Ever greater sums of periodic interest on a multiplying sum of debt commit ever more of a circulation to servicing debt, and leave ever less of earnings or circulation for the subjects of the system to procure their own production. Particularly as the debt of a usury system is increased in proportion to commerce then, the prospective interest income from investments is diminished likewise, as the debt serviced by the entire system commands ever more of the circulation.

The first thing for us to understand then, is that under a system of usury, it is impossible to provide for the disabled, the retired, and the elderly as we could if all commerce were free of usury. Ever more of our efforts instead, are directed to servicing debt, leaving all the less for any other purpose.

In time, as we must maintain a circulation by re-borrowing payments against principal and interest as subsequent debt increased so much as periodic interest, the debt multiplication process inherent to a usury system ultimately makes it impossible to afford anything but debt service. Does the system multiply wealth or return these efforts to the people? If it did, then why take the wealth produced by the people from the people in the first place?

Only production increases wealth, and when the wealth or production of the people is taken from them that the work to produce a thing is not sufficient to procure it, they suffer to the degree they are deprived of the fruit of their doings. As Argentina's "economy" collapsed, half of what Argentina paid against foreign debt alone — which was enough to bankrupt them — went toward interest. Internally, huge costs were likewise imposed by subjecting the system to interest — which inherently and irreversibly multiplied their debt, and the further wealth to be taken from them by interest.

The interest we might charge each other in the course of "investment" does not bring this interest on the circulation back to us. Nor can it accomplish anything but to re-distribute the meager, ever-diminishing wealth left the subjects of the system. Typically, instead, ever greater interest on ever greater debt distributes ever more wealth to the world's "financiers" — who typically deploy this interest likewise in "investments" — the "profit" from which deprives the people further of the wealth they alone produce.



So this is the character of the system within which the hope exists to protect savings, and to acquire further wealth, by "investment."

If usury then is a paradox, it is only a paradox where the subjects of the system expect its design is to their benefit. But it is only a system which from the beginning was designed to profit from them who do not understand it.



Do we then want to struggle against the ever rising tide of debt inherent to usury — re-distributing the ever diminishing portions of our possible production amongst ourselves in the hope that redistribution somehow is just? It cannot be just. Nothing at all fixes earnings to what has been contributed to prosperity. The whole system is made a system where earnings are sought entirely in disrespect of contribution. Merely in the occupation of aging homes, every subsequent generation can only be forced to service greater debt in respect to what debt it is possible for them to service. Ultimately, multiplication of debt in proportion to commerce exposes commerce in its entirety to terminal debt.

Or can we better sustain ourselves if we establish a system in which we are not deprived of our production; the value of currency is not depreciated; and debt is not multiplied inherently and irreversibly in proportion to commerce?



It is only because the imposed system of usury perpetually depreciates the value of money, that under a usury system, we assume any advantage in "investing" whatever. Otherwise, what is desirable at all about "investing" — if investing redistributes wealth disproportionate to production, and thus must deprive the world's producers of reward equal to their efforts?

Investment to protect earnings saved against the depreciation intrinsic to a usury system is not an advantage: Aside from attempting to profit unjustly, what we are doing is attempting to escape an incredible disadvantage of the overall system — this being the perpetual depreciation of the potential of money by a system which perpetually and irreversibly multiplies debt in proportion to commerce.

Thus under a usury system we are compelled to "invest" in the hope of protecting what we lay away for the future. But under usury, every such investment can only return some portion of an ever-diminishing share of the wealth the people themselves produce, because ever more is delivered to servicing the multiplying debt imposed upon us.

To even greater irony under usury then, the typical fear of the elderly, the retired, the investor... is that they shall be all the worse off if they cannot cling to "investments" which, under the rising costs of all things resulting from the usury system, only increase the burden of those who produce the wealth that sustains the system. The earnings of the latter are attacked in turn by the multiplying debt of the system, and the thirst of "investments." Under the costs of debt multiplied to ever greater proportions of commerce, ever less of a circulation remains to sustain the real producer. Investors and the deprived producer are left to quibble over what remains.

Thus the contemporary investor's commitment to the retention of the iniquitous system, in turn assures the further multiplication of debt in proportion to commerce inherent to the usury system, which of course will ultimately fail all commerce, including the instruments of their investment.



These are the prospects of usury.

Every such system suffers a maximum possible lifespan expressed by an ultimate moment when multiplication of debt in proportion to commerce exceeds the always finite debt-servicing powers of the subjects of the system.

In the course to that ultimate, inevitable termination under insoluble debt, ever greater impediment is imposed by the system, whereas otherwise, in a system free of impediment, the people would enjoy the entirety of the fruits of their labors — and this would be a far greater pool from which to provide for retirement, humane efforts, etc.



How much greater would this pool of resources be under real economy — free of impediment, a manipulated currency, inflation and deflation, and multiplication of debt in proportion to commerce?



The answer is in the numbers of every social sphere as affected by present systems.



Suppose we have a family marginally sustaining their livelihood. They occupy a home which not long ago may have been built for 100,000 units of some currency, and which has a hundred year lifespan. Their mortgage under usury might be 1,000 units of currency per month.

However, under an economy perfected of inflation and deflation and multiplication of debt, and where the currency is merely a medium of exchange, and where they would be compelled to pay for the home as they consume of it (with an equal measure of their own work, and no more), then the home is paid for over the course of its lifespan, or at the rate of 100,000 units of currency distributed over 100 years — which determines instead, payments of 1,000 units of currency per year, or 83 units per month.

A home built by a few months of work is paid for by an equal few months of work.



The costs of servicing debts subject to interest thus pervade the usury system. The costs of all things are multiplied by usury, in the form of manufacturing facilities financed likewise and so forth; and so if we may properly use this example to extrapolate how their earnings may further serve them in a system free of interest or usury, plainly, their earnings go a full twelve times as far.

Considering that the same home under a usury system however is typically re-sold repeatedly for an "appreciated value" — which really only commits successive owners to pay ever more exorbitant sums of interest on a home which has already been paid for many times over — then during the aging of a usury system, the advantages of earnings are respectively even greater in a usury-free system, where the subjects can exchange their production for an equal measure of production.



Under usury, we might contrive some attempt to sustain the elderly and retired such as the so-called Social Security system of the United States — a fund robbed to nil under the working conditions of the "economy," in the ever more depriving conditions predicated by sustaining the costs of ever greater debt.

Under such a system, we also attempt to sustain the elderly and retired by investment in securities — making the ostensible securities vulnerable to characteristic manipulation contributing to further deprivation of the system. It is a system whereby the greatest collections of "capital" — in truth evidencing the production of they who were deprived of it — reap the greatest profit from the system, at the further expense of the subjects of the system. The people are robbed from every angle.

The difference in the cost of a home under the two systems nonetheless reflects the degree to which the "financial" (usury) system deprives the subjects, or takes "profit" from them.



Free of usury, our earnings go 12 times as far by this example.

Suppose now, instead of paying all that we do to usurers and trying to leap-frog each other into prosperity from the ever-diminishing scraps left, and suppose instead of compelling people to contribute to a bankrupt device of "social security," we compel the populace under a usury-free system (or it is their voluntary decision in lieu of no intervention by "big government" at all), to provide for their own retirement security?

Let us suppose the populace saves half its earnings (not needing to spend them on usury), and thus still has more than 6 times the spending power under a usury-free system perfected of inflation and deflation, manipulated value, and multiplication of debt in proportion to commerce. Paying $83 per month for their home instead of $1,000 per month under usury, they can save $500 per month they could not otherwise, and still have a half-dozen times the spending power they do now.

Although no "representative" government offers a readily perfected, usury-free economy to its populace, it is difficult to imagine an intelligent public preferring to pay the greater for naught, only to suffer all the intrinsic disadvantages of usury — with ultimate, system-wide insoluble debt and failure the eventual consequence.

Under true economy, perfected of inflation and deflation, manipulated value, and multiplication of debt, we benefit a half-dozen orders of spending power while able to save a half-dozen orders of present spending power for the future. We could work half our life with twelve times the spending power spread over our working and retirement years.

Is there a corporation, a small business, a person who contributes to prosperity who would not benefit?



So, as the elderly and retired of the present are diminished in sustainability by investments subject to the ever diminishing solubility of contemporary usury systems, let us imagine a further thing.

If instead their life-long efforts could have prospered free of usury, they may or may not have saved so much as half their earnings. But twice that was taken from them unjustly, by the system.

If we were to restore to them what imposed usury systems have taken without justification, we could simply publish half their life's earnings back to them (less what of this may typically have been spent during retirement), that subsequent generations each can sustain themselves according to their own thrift.



This is what I meant in my prescription for establishing mathematically perfected economy, by "reverse the damages."

To establish mathematically perfected economy in the wake of usury, and to avoid the ultimate consequences of a usury system, we must creatively restore to the innocent what has been taken from them unjustly, under an unsustainable system. Thereafter, mathematically perfected economy alone is sustainable, as new currency is issued to sustain new prosperity; debt is not multiplied by interest; and as paying debt according to rate of consumption of the asset associated with the debt alone eliminates inflation and deflation — or manipulation of the value of the currency.

Under mathematically perfected economy alone may we pay for our production with an equal measure of production. And under mathematically perfected economy alone, may we sustain ourselves in retirement or disability to the greatest degree possible.



A very important question.





mike montagne — PEOPLE For Mathematically Perfected Economy





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