Social Credit Theory:
Money grows in trees!
By Overwatch
There are several topics that I
contemplated writing about this time, but the sudden pervasiveness of
this repackaged “Free Lunch” economics insists that I do whatever
I can to save the minds of those searching for answers as the current
economic system implodes around them.
The most important point has already
been made twice, first in the “Money grows in trees” reference
and secondly in referencing the theory as a “Free Lunch” theory.
The Theory of Social Credit posits that the immutable economic law of
scarcity is somehow suspended if people just “believe”. If
something seems too good to be true, it probably is; and it
definitely is in this case.
For those who may be unfamiliar with
what the Social Credit Theory/ Argument is, I will go over the basics
very quickly. Social Credit advocates rightly attack the destructive
nature of debt based fiat currencies, noting that paying an entity
for fiat money creation (in the case of the US, bond holders
and/through the Federal Reserve System) , seems like paying for
nothing. Why not just print the money, instead of making interest
payments on it as well (from taxes or through printing with no debt
backing the new money)? Social Credit arguments centered on the US
quote excerpts from the US Constitution (Article I, Section 8 “The
Congress shall have Power….. to coin Money, regulate the Value
thereof, and of foreign Coin, and fix the Standard of Weights and
Measures”) to point out how the US Government has needlessly
abrogated this right to a public-private partnership to the detriment
of the taxpayer and national fiscal health. Again, why not just print
the money? We could have all the money we want for free! Sounds
pretty sweet right? On the contrary, this theory is possibly the only
thing worse than the current system.
The first problem with this theory
is it focuses on only one aspect of the entire economy (money, or the
exchange medium), and then focuses only on one aspect of the exchange
medium (debt base). It does not take into account the problems of
fiat (“by decree”, or “legal tender laws”, a government
supported monopoly of money), central banking (the cartelization and
monopoly of the banking sector), fractional reserve banking (the
freedom of the banks to keep less reserves than the amount needed to
cash out deposits, etc.), or the inflationary aspect of cheaply
produced currency (particularly fiat). Social Credit advocates go so
far as to say that inflation is good for the economy, while it is
deflation that is bad, speaking only in terms of how deflation makes
things bad for borrowers. I thought the point was to avoid debt? That
is only one example of the cognitive dissonance required to make this
Theory fly.
So in this potential land of
unicorns and marshmallows, Social Credit Theorists claim that a
country may just print all the money it wants, and thereby fund all
the social programs, infrastructure projects, etc. that the people of
the nation need, while also providing enough money for everyone to
live comfortably, while legal tender laws ensure cooperation from
everyone. They usually reference prior usage of “free money” in
the US in glowing terms, such as “Colonial Scrip” and Lincoln’s
“Greenbacks” as examples of success. They even go so far as to
suggest that Lincoln was assassinated by the banking establishment
for bringing this wonderful economic freedom to the citizens of the
country. However, they never spend any time on expounding the full
history of those currencies, and for good reason. They must leave out
important facts about these currencies, that they were used to fund
wars (how noble and helpful), the notes were supposed to be
backed by specie (precious metals) but either never were or only
partially (lies) , and that after some time they often could only be
spent at gunpoint (particularly in the case of the Colonial Scrip,
the Continental Army was not above stealing supplies when wagonloads
of paper scrip was refused). Why give up real goods and services for
paper and ink? This leads into the next argument.
Austrian
economists have always held that precious metals will win the
currency competition in a free market economy (I will not explain
this whole argument here, as there are plenty of free resources
online about this position). Social Credit Theorists disagree,
positing that in a free market economy, “Social Credit banks”
will offer interest free loans of the money-printed-on-demand, and
that since any loans in commodities will require interest with
repayment, the cheaper loans from the Social Credit institutions will
quickly run commodity currencies out of the market. They overlook a
key problem with this assertion: Just because you can get a loan,
doesn’t mean the seller has to accept the payment. Without
legal tender laws, Gresham’s law (bad money will drive out good
money) does not work. I have yet to see a social credit theorist
explain why someone would sell hard earned real goods or sell their
labor for something they could easily print up themselves at home, or
notice that when they appeal to Gresham’s law in defense, they are
admitting to supporting bad money. This leads us back into the
initial contention with “Free money”: If printing as much money
as desired is the path to prosperity, why don’t we all just start
printing our own money? Why not just start paying for things in
literal monopoly money? What makes this different from
counterfeiting?
The Social Credit Theory is merely
another attempt at a free lunch. Stealing. Getting something for
nothing. If one entity can make money as it pleases, why bother with
loans from them? Why can’t you do it? Why can’t we all do it? Of
course if we all do it, it would be worthless, which is why Social
Credit Theorists don’t like this question, or really any questions
that don’t involve their anti-bond arguments. When someone
counterfeits (creates) money, they get the goods the purchase for
free. This is no different than anyone else printing money, whether
it’s the US Treasury and Federal Reserve, or a Social Credit
institution. There (Still) Ain’t No Such Thing As A Free Lunch
(TANSTAAFL).
No comments:
Post a Comment