Relay-Version: version B 2.10 5/3/83; site utzoo.UUCP Posting-Version: version B 2.10.2 9/18/84; site calgary.UUCP Path: utzoo!lsuc!watmath!clyde!burl!ulysses!mhuxr!mhuxn!ihnp4!alberta!calgary!radford From: radford@calgary.UUCP (Radford Neal) Newsgroups: net.politics Subject: Re: What Social Credit is. Message-ID: <540@calgary.UUCP> Date: Fri, 8-Nov-85 18:45:18 EST Article-I.D.: calgary.540 Posted: Fri Nov 8 18:45:18 1985 Date-Received: Wed, 13-Nov-85 21:47:33 EST References: <787@cybvax0.UUCP> <82@ubc-cs.UUCP> <530@calgary.UUCP> <1239@mhuxt.UUCP> Organization: University of Calgary, Calgary, Alberta Lines: 36 > > The theory as I understand it is that the economy has a continually > > increasing need for a medium of exchange, which, if not satisfied, leads > > to a depression. Social credit advocates printing of new money to satisfy > > this need and its distribution to the populace (and also maybe using it > > to finance the government, I think). > > Pardon my ignorance, but I was under the impression that the federal > government *does* print lots of money every year and *does* use it to > help finance the government. You are quite right of course. The government (central bank) does "print" money at times to finance the deficit. This is called "monitized debt" and isn't really debt at all, since it is payed for by the citizens of the time via inflation. The difference from Social Credit ideology is that they don't admit it (very loudly at least). Also, Social Credit thinks money should be printed even if not needed by the government, and distributed amongst the populace. > > They don't like the present system of > > allowing the private banking system and central bank to create money. > > Maybe I'm wrong, but I really don't believe that our present system > allows private banks to create money. (If I am wrong, could you explain > to me just what I have to do to open up my own bank and start printing > my own?) Private banks do create money, through the mechanisms of "fractional reserve banking". This is the major way money is created today, the other being direct creation by the central bank to finance deficits (see above) or for other reasons (e.g. bailing out failing banks). To start your own bank and create some money you need only convince people that a cheque drawn on your bank is as good as cash, even though you don't have the cash to honour all the cheques that might be written. Radford Neal