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Thursday, 21 May 2020 17:47

From the Proposed ABC Act to Full-Fledged Douglas Social Credit

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“Real people, not corporations need to be at the center of any legislative relief effort to combat the harms caused by this global pandemic. Too many of our workers, low-income people and families across the country were instantly impacted and we need to have an aggressive and inclusive financial assistance program.” – Congresswoman Rashida Tlaib 

 

     Last month (April 2020) saw the introduction of the ABC Act or “Automatic Boost to Communities” Act as a bill in the US Congress. The bill was presented by Reps. Rashida Tlaib (D-MI) and Pramila Jayapal (D-WA) and was sponsored by half a dozen other Democrats. It is very interesting as a piece of proposed legislation from several points of view. Indeed, it will be of particular interest to Social Crediters. Here’s is the link to the bill: https://tlaib.house.gov/sites/tlaib.house.gov/files/ABCAct.pdf,

     In essence, what has been put forward is a temporary implementation of the bare-bone essentials of the Douglas Social Credit monetary reform, as part of the U.S. government’s financial response to the Covid-19 crisis. Imagine that, all this time—countless decades in fact— Social Crediters have been calling for certain changes to the financial and economic structure of society, and now, if this bill is passed and becomes law, we will have a taste of it, ironically, without any of its proponents having known anything at all, presumably, about C.H. Douglas. That very fact confirms of one of Douglas’ key predictions: The increasing financial stress induced by ever-increasing debt in combination with steady labour displacement will eventually force a solution along Social Credit lines; the Coronavirus was merely the proverbial feather that broke the Camel’s back. Make no mistake about it; what we are looking at here is Douglas Social Credit in embryo.

     Let’s examine the details of the bill and how it intersects with Douglas’ Social Credit ideas.

     To begin with, the ABC Act would provide each eligible recipient with 2,000 dollars per month during the “payment period” (which would basically coincide with the time of the Coronavirus pandemic or crisis) and then 1,000 dollars per month to each eligible recipient for a one year period after the (initial) payment period ends. These payments—which may be regarded as akin to Social Credit’s proposal for a National Dividend because they would be distributed to all, independently of employment status—could be made via direct deposit (should the Treasury be given access to the individual’s banking details) or via a proposed BOOST card (which would be a prepaid debit card, free of any usage fees, penalties, or restrictions).

     The BOOST card option would be particularly important for people who do not have bank accounts or easy access to such accounts. In addition to debit card transactions, the BOOST card would allow for the full amount of a payment to be withdrawn immediately in cash from any ATM in the country without any fees being incurred. BOOST cards would be distributed via direct mail, in-person pickup, web access, telephone access, or at-risk outreach. The aim here is to cast the widest possible net so that no one will be left behind or fall through the cracks.

     As it is written, the bill would provide the 2,000 dollar monthly stimulus and then the 1,000 dollar recurring payment to all citizens, residents, and even to non-resident aliens who have been in the U.S. for more than 3 months, beginning on December 13, 2019. This means that a family with, say, two children, would receive 8,000 dollars monthly during the payment period and 4,000 dollars for one year afterwards. Since it includes illegal aliens and children and/or other dependents on the same basis as adults, the bill is perhaps even wider and more universal than what Social Credit legislation mandating a National Dividend would envisage.

     The payment period would commence on the first day of the first month after the bill had been signed and made into a law. So, if the bill were signed on June 15th, the ‘payment period’ would begin on July 1st.  The end of the payment period would be whichever comes later, either: 1 year after the termination of the emergency declared on March 13, 2020, by President Trump under section 501(b) of the Robert Stafford Disaster Relief and Emergency Assistance Act (42 U.S.C. 5191(b)) with respect to the COVID–19 pandemic; or 1 year after both of the following: 

  • the national unemployment rate (as determined by the Bureau of Labor Statistics) is within 2 percentage points of the national unemployment rate on the moving average of December 2019 through February 3, 2020; and
  • the 3-month average of the national unemployment rate has declined for two consecutive months.

     When it comes to the typical question, “but where will the money come from?” the UBI-like payments proposed by the ABC Act would be funded through the money-creation powers of the government via the issuance of debt-free money. More specifically, the Treasury would mint two 1-trillion platinum coins (which the U.S. Constitution allows the government to do) in accordance with title 31 of the U.S. Code:  https://www.law.cornell.edu/uscode/text/31/5112. Additional coins could be minted as required. These coins would then be bought by the Federal Reserve central bank in exchange for digital dollars that could be spent by the Treasury.

       Such a proposal for what would, in essence, be a monetary UBI (funded by newly created money), as opposed to a fiscal UBI (paid for by dipping into the tax till, consisting of existing money, and/or by increasing the National Debt) is, once again, fully in line with how Social Credit’s National Dividend would be financed. There is no need for borrowing or for taxation when the public authority can create new money that is free of debt and inject it into the economy in the form of a basic income or dividend payment.

     In close connection with the idea of “digital dollars,” the bill proposes a digital dollar system that would include Digital Dollar Account Wallets by 2021. The idea is that these “FedAccounts” could become a permanent feature of the financial system in the United States as a way of distributing UBI-like payments directly to the citizens and even to businesses. Such accounts would have things like debit cards, online account access, automatic bill-pay, mobile banking and ATMs associated with them.

     But where do the ABC Act and Douglas Social Credit differ? By briefly enumerating some of the differences and complementing this list with apposite explanations as is deemed necessary, we can simultaneously point the way out from the present morass towards the future, i.e., the path towards a full-fledged Social Credit financial system, economic order, and civilization.

  1. Whereas the ABC Act is temporary, the Social Credit system would be permanent. The idea here is that the economy, even in good times, requires a steady injection of debt-free money (in the right proportions, of course) in order for it to function optimally in service to the common good (see point #3). The ABC Act, if passed, will show that it is possible to inject money in this way, i.e., that the knowledge and infrastructure to do it already exist.

 

  1. Whereas the ABC Act stipulates a kind of guaranteed amount (2,000 per person initially, followed by 1,000 per person for a year after the payment period), the Social Credit National Dividend would be indexed to the economy’s productivity and could be greater or lesser depending on how much debt-free credit distributed as an employment-independent income the economy can support in any given period.

 

  1. Whereas the ABC Act does not recognize that there is an endemic underlying gap of consumer buying power in the form of income, the Social Credit scheme is based on the contention that consumers, as an aggregate, are not automatically paid sufficient money in the form of income to buy back in full whatever is produced. The flow of total costs and prices always exceeds the flow of total consumer incomes and, in lieu of palliatives like government make-work production, excessive private growth, especially capital production, and production for export, the flow of total consumer costs and prices will also exceed the flow of total consumer incomes. This 2ndconsumer price/consumer income gap allows for the possibility that the Treasury could monetize it with “digital currency” (of the type that the ABC Act proposes) and could distribute at least part of it as a UBI-like payment to each eligible recipient.

 

  1. Closely connected with #3, whereas the ABC Act does not seem to be concerned with any prospect of demand inflation, Social Credit recognizes that the volume of debt-free money created and distributed to fill the underlying price-income gap needs to be calibrated to the size of the gap and not overshoot it. This is one reason why the National Dividend would fluctuate in terms of the size of individual payments. Furthermore, partially to ensure that a large portion of the money that is earmarked to fill the gap will be used in conjunction with the purchase of goods and services (and not be saved, re-invested or used to bid up the prices of fixed assets), Douglas proposed that part of the money be distributed in the form of a price discount on all retail goods and services. This Compensated Price would be a universal rate of discount determined by the consumption/production ratio (i.e., the degree to which financial production costs exceed the financial costs of all associated consumption in the same period) that would see retailers lower their prices by a certain percentage, say 20%, and then be reimbursed by the Treasury or a National Credit Office to cover the cost of their discounts. Finally, the ability of financial institutions to create new debt-money in the form of consumer loans would have to be restricted and eventually eliminated altogether if inflation is to be avoided.

 

  1. Whereas the ABC Act would handle the account for the debt-free money by considering the trillion dollar Platinum coins as assets on the Fed’s balance sheet, against which the digital dollars given to the Treasury would be issued as liabilities, Social Credit proposes the establishment of a National Profit and Loss Account (or Supply and Demand Account) which would effectively count unsold or otherwise unsellable consumer production as assets and the additional income necessary to distribute that production and liquidate its costs via the dividend and the discount as liabilities. 

  

  1. Whereas the ABC Act seems to be presuppose, or is at least neutral with respect to the current policy of full employment, Douglas Social Credit recognizes that, as technology advances, it is neither reasonable nor possible to insist on the archaic rule that everyone who can work must work in order to have an income. As more and more people are, or could be, displaced by machines in the workforce, the opportunity for paid leisure must increase and be equitably distributed amongst the population. Such a provision of paid leisure time allows for what is happening on a physical level to be adequately reflected on the financial plane.

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Thanks to Mark Anderson from American Free Press for his feedback and help with editing.

Last modified on Saturday, 30 May 2020 22:52

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1 comment

  • Comment Link John Kilford Sunday, 31 May 2020 22:54 posted by John Kilford

    This pandemic certainly has stirred the financial/political pot of who and what should be done to not only remedy the coronavirus-19 effect on the world's economic status and it's populations well being. I am confident that the world's medical scientists will create an effective vaccine, but I feel those men and women in positions of power will continue to jostle for more power and control of the population. It is simply in their nature to do so no matter how much better the Social Credit economic, social, and environmental remedies are. The media and courthouses are full of factual evidence of the cause and effect of the current financial-political system in all governments. The same media vehicles are used to pull the wool over the populaces eyes while the pot stirrers cook up more ways to control blinded citizens. What hope do we have when the citizens are represented by wolves in sheep clothing? Here, in New Zealand, we are about to have a general election to put more power in the hands of the financial-system-bound center of government. Perhaps the pandemic might remove the weeds from our countries pot.

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