Credit cards are a blessing while you're
spending. Credit cards are hell when
it's time to pay. From what I hear
the average American family owes over
$10,000 on their credit cards. As if
that weren't bad enough, the average
homeowner has a mortgage. That's still
more debt. The U.S. economy is experiencing
problems due to foreclosures on homes.
It seems that people have been borrowing
in the expectation that they would
have an increase in income and that
their homes would increase in value.
When those expectations were dashed
by the loss of jobs and the bursting
of the real estate bubble, those mortgages
became impossible for the owners to
pay off. As a result, there are many
homes whose market value is less than
the money still owed on them.
Wouldn't it be nice to just have
that debt go away? Wouldn't it be
pleasant to contemplate a future
in which you didn't owe anyone any
money at all? If you have a crushing
amount of debt today in our physical
object money (POM) economy, you know
that you are stuck. Your reputation
is shot. Your chances of taking care
of your family are just about nil.
You have trouble getting more credit.
But at the transition to a non-POM
economy, your debt simply disappears.
It's gone. It doesn't exist any more.
There is no credit and no debt in
a non-POM economy.
How can that be? How is it that
at the transition to a non-POM economy
one's debts simply are no more?
It's simple, really. You see, non-POM
is not transferable from one person
to another nor from one group to
another nor from one organization
to another. So even if you retained
your debt you could not pay it off.
There would be no way for you to
give any of your money to any other
person nor to any organization. Whether
your debt is to a friend, to a business,
or even to the federal government,
it simply cannot be paid. So the
debt is no more.
If you have a home it cannot be
foreclosed. Since in non-POM there
are no taxes of any kind, you cannot
lose that home for failure to pay
taxes. Your assets are safe. They
cannot be taken for failure to pay
any debt you may have had on them.
Of course this lack of debt also
means that you can never borrow money
but then you will never need to borrow
money in a non-POM society.
But what about the debts of organizations?
Let's say that corporation XYZ owes
corporation ABC a million dollars
before the transition from POM to
non-POM. What happens to that debt?
At the transition corporations cease
having money. A corporation is not
a person and only a person can have
money. Therefore the whole issue
simply ceases to exist. Though we
today treat corporations in the law
as persons in many respects, we secretly
know that they are not really people.
If a corporation ceases to have money,
that is no person's loss. So if corporations
cannot have money there is no way
for them to give each other money.
That brings us to the largest debt
of all, the national debt. The government
also is not a person. A government
cannot have money either. It cannot
accept money nor pay money. The national
debt will also cease to exist at
Supply and Demand in a non-POM
A POM economy runs on demand, dollar-backed
demand. If people with money enter
the market and buy, prices
are driven up and that motivates
sellers to produce more items for
sale. When there is too little demand,
prices fall and sellers, lacking
motivation, provide fewer items for
sale. But that means that if few
people have money to spend there
is little demand and therefore, little
production takes place. In other
words, even though there are lots
of people who want to work and who
are skilled at what they do and even
though there are plenty of raw materials
to work with and even though people
really want the things they can produce,
the supply of money, a figment
of the human imagination, limits and
reduces the amount of goods produced.
I know it sounds insane but it's
Those people with POM to spend are
usually also producers of goods and
services. Their supply of money comes
from other people spending. But the
flow of money to the buyers of goods
is not always steady and regular.
There are all sorts of irregularities
in the supply of money that is available
for spending. For example, let's
say that there is bad weather and
the crops fail on a large part of
the farms in a region. That reduces
farm income. The farmers cannot repay
their loans so some banks fail. The
people who had money deposited in
those banks lose their money. Thus
we have a large number of people
who spend less which results in lower
prices for goods and less incentive
to produce more goods. Therefore,
the sellers of those goods lay off
their employees who produce, distribute,
and sell those goods. (This actually
happened in the late 1920s and 1930s
in the United States and was a major
factor in producing the Great Depression.)
This is the way recessions and depressions
are caused. In a POM economy there
is a way to prevent the supply of
from being reduced with a resulting
reduction in demand. That way is
through the use of credit, loans
and debt. The borrowing of
money (artificially) increases
money because with a loan both the
borrower and the lender each own
money that only the lender owned
before the loan. Therefore, the central
banks of industrialized nations make
loans less expensive when people
seem to be reluctant to buy due to
recessions or depressions. They encourage
an increase in the supply of money
so that there will be more demand.
(Of course if the only people who
can get those loans already have
plenty of money and don't increase
their consumer spending, the increase
in the money supply just results
in inflation with no increase in
How does a non-POM economy operate
without debt? How can a non-physical
money prevent recessions and depressions
without there being any debt?
The key is to remember that in a
non-POM economy, the supply of money
depends only upon the supply
of goods and services designated
If more luxuries are
produced there is more money available
to pay for net benefits. Therefore,
from the point of view of the producer,
an increase in production will almost
always result in an increase in income.
This is a relationship between producers
of goods and the Payers who credit
their accounts. Note that the customer's
buying does not control the supply
of money. The money that the customer
spends ceases to exist and the supply
of luxuries for sale is reduced by
the same amount since the customer
now owns that luxury. Thus there
is always money available to buy
the existing luxuries and always
luxuries available to sell for the
existing money. The supply of money
and things that money can buy is
always in perfect (for all practical
purposes) balance. Money does
not exist independently of the supply
of goods and services for sale with
a non-POM. Therefore, there
is no need for credit or debt to
provide motivation for production.
If you produce there will always
be money for you to earn.
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