How to rid ourselves of the credit problem

ABOLISH CREDIT.001


Traditional economies create the need for loans and interest. They also cause rapid fluctuations in the money supply, leading to recessions, inflation and such. This has been our reality for many years. How does Copiosis operate without credit?

Money in Copiosis Economies comes into existence when earned and ceases to exist when spent.  It is never transferred from one account to another nor from one person to another.  Any dollar that exists is uniquely the property of one person.  It never has belonged to anyone else and it never will belong to anyone else.  Therefore, the money cannot be loaned or borrowed.  Credit simply does not exist.

For the ordinary person, daily life in Copiosis is pretty much the same as now except that instead of being in debt one is on the “pay as you go” plan.  If one wants to buy something, one saves up the money until one has enough to buy the item (good or service) and then one can buy the item, “paying cash” as it were.  This means that one never has any bills to pay and one never, ever has to pay interest.

Today, people have real trouble saving up money because they have to buy everything they consume.  That is, they either have to rent or buy housing, and pay for food, clothing, and medical care, not to mention taxes.  They have to contribute to social security and pension plans.  When one looks at one’s pay stub there are all sorts of deductions.  For most people much of what’s left has to be spent on just staying alive.  Very little is left over for the luxuries of life.

In the Copiosis economy, the only thing one has to pay for is Luxuries.  That is, everything else (Necessities) one obtains without paying.  Those who give Necessities to others are paid, but not by the consumer.  Therefore, it is easy to save money since it buys only Luxuries.  Whatever one earns one can keep or spend right away, but one is never forced to spend money.

Business and credit

But that’s just the consumer’s point of view.  What about someone in business?  How would you function in business without credit?

The first difference in doing business in Copiosis is that one cannot buy anything.  Sure, if you have money you can buy Luxuries for your own use or to give to friends, but those Luxuries have nothing to do with your business.  In a Copiosis economy, if you are in retail you will need a store, you will need stock, and you will need clerks and others to help operate the business.  Since you can’t give anyone else your money, (like video game points, it comes into existence in your account when earned and ceases to exist when spent) what can you offer them to get them to work with you?

You can offer them a chance to benefit others.  In a Copiosis economy that’s how people earn money, by doing things which have good consequences for others.  So if you have a computer store, for example, your clerks could benefit others by helping them to choose just the right computer, software, peripherals, and accessories to meet their needs.  Since Volunteers will be paying your clerks, your business won’t need to budget for staff.

What about the building your shop is in?  Your shop is a business, not a Luxury so you won’t need to buy or rent the building either.  Someone who owned the building gave you the building or at least permitted you to set up your shop there.  That’s how the owner can earn money, by helping you to help others.  When you get paid for the good your shop does, they get paid some as well.  The better you do, the better they do.  So to obtain a building to open your shop in, you will have persuaded the owner that the use you will make of that building will provide more benefits to others than any of the other potential uses for it.  That way the building doesn’t cost you money either.

Finally, what about the stock your shop will sell (if it is Luxuries) or give to others (if Necessities or Capital Goods)?  How do you get that stock?  Well to generate Net Benefit*, the producers of your stock items have to get their wares into the hands of people who will benefit from their use.  These producers will be looking for people who will see to it that their product is used to produce the maximum benefit.  The producers will happily give you stock for your store if they believe that you will give or sell those items to people who will greatly benefit from their possession, because that will earn the most money for the producers; so you don’t need money to acquire stock for your store.

The same thing goes for store utilities and all the other “overhead” that are needed to make a functioning business; such as office supplies, advertising.  And in every case the money your suppliers are paid doesn’t come from you but as a result of how much benefit you produce for others using their goods/equipment.

In order to get other people to work with you, and to give you their products, and to allow you to use their building: you must have a good reputation.  If you lie, cheat, and/or steal, word will soon get out… and no one will be willing to work with you or provide you with any sort of capital.  Therefore, you will have incentive to be very careful in how you treat the building, your stock of merchandise, and especially how you treat your employees.  Remember, you aren’t paying them.  They can get along just fine with no money at all so they really don’t need this particular work.  On the other hand, their reputation as good workers who do a good job and are easy to work with is what makes other people want to have them as co-workers.  Therefore, they have a vested interest in doing good things while working with you.  In other words, you are all on the same side, the same team and it’s obvious to all.  You are not in a zero-sum situation because the more money one of you makes the more the others make.  You can’t win if they lose and they can’t lose if you win.

Finally, as a store owner, you can’t lose money.  The worst you can do is make no money at all.  Any money you already have is not at risk.  You don’t need to buy insurance since your business needs no money.  You can’t be sued for money.  You don’t need to provide pensions or medical insurance for your staff.  You don’t have to worry about government regulation since there is none.  So your business needs no payroll office nor any of a host of other expensive, labor intensive, bothersome bureaucratic procedures and processes that produce paper shuffling but do nobody any good (except the person paid to do them!).  And, of course, your business does not have to pay any interest on any loan. Your business has no expenses at all.

*Net Benefit = Overall Benefit – Negative Consequences

How to rid ourselves of the credit problem

ABOLISH CREDIT.001


Traditional economies create the need for loans and interest. They also cause rapid fluctuations in the money supply, leading to recessions, inflation and such. This has been our reality for many years. How does Copiosis operate without credit?

Money in Copiosis Economies comes into existence when earned and ceases to exist when spent.  It is never transferred from one account to another nor from one person to another.  Any dollar that exists is uniquely the property of one person.  It never has belonged to anyone else and it never will belong to anyone else.  Therefore, the money cannot be loaned or borrowed.  Credit simply does not exist.

For the ordinary person, daily life in Copiosis is pretty much the same as now except that instead of being in debt one is on the “pay as you go” plan.  If one wants to buy something, one saves up the money until one has enough to buy the item (good or service) and then one can buy the item, “paying cash” as it were.  This means that one never has any bills to pay and one never, ever has to pay interest.

Today, people have real trouble saving up money because they have to buy everything they consume.  That is, they either have to rent or buy housing, and pay for food, clothing, and medical care, not to mention taxes.  They have to contribute to social security and pension plans.  When one looks at one’s pay stub there are all sorts of deductions.  For most people much of what’s left has to be spent on just staying alive.  Very little is left over for the luxuries of life.

In the Copiosis economy, the only thing one has to pay for is Luxuries.  That is, everything else (Necessities) one obtains without paying.  Those who give Necessities to others are paid, but not by the consumer.  Therefore, it is easy to save money since it buys only Luxuries.  Whatever one earns one can keep or spend right away, but one is never forced to spend money.

 

Business and credit

But that’s just the consumer’s point of view.  What about someone in business?  How would you function in business without credit?

The first difference in doing business in Copiosis is that one cannot buy anything.  Sure, if you have money you can buy Luxuries for your own use or to give to friends, but those Luxuries have nothing to do with your business.  In a Copiosis economy, if you are in retail you will need a store, you will need stock, and you will need clerks and others to help operate the business.  Since you can’t give anyone else your money, (like video game points, it comes into existence in your account when earned and ceases to exist when spent) what can you offer them to get them to work with you?

You can offer them a chance to benefit others.  In a Copiosis economy that’s how people earn money, by doing things which have good consequences for others.  So if you have a computer store, for example, your clerks could benefit others by helping them to choose just the right computer, software, peripherals, and accessories to meet their needs.  Since Payers will be paying your clerks, your business won’t need to budget for staff.

What about the building your shop is in?  Your shop is a business, not a Luxury so you won’t need to buy or rent the building either.  Someone who owned the building gave you the building or at least permitted you to set up your shop there.  That’s how the owner can earn money, by helping you to help others.  When you get paid for the good your shop does, they get paid some as well.  The better you do, the better they do.  So to obtain a building to open your shop in, you will have persuaded the owner that the use you will make of that building will provide more benefits to others than any of the other potential uses for it.  That way the building doesn’t cost you money either.

Finally, what about the stock your shop will sell (if it is Luxuries) or give to others (if Necessities or Capital Goods)?  How do you get that stock?  Well to generate Net Benefit*, the producers of your stock items have to get their wares into the hands of people who will benefit from their use.  These producers will be looking for people who will see to it that their product is used to produce the maximum benefit.  The producers will happily give you stock for your store if they believe that you will give or sell those items to people who will greatly benefit from their possession, because that will earn the most money for the producers; so you don’t need money to acquire stock for your store.

The same thing goes for store utilities and all the other “overhead” that are needed to make a functioning business; such as office supplies, advertising.  And in every case the money your suppliers are paid doesn’t come from you but as a result of how much benefit you produce for others using their goods/equipment.

In order to get other people to work with you, and to give you their products, and to allow you to use their building: you must have a good reputation.  If you lie, cheat, and/or steal, word will soon get out… and no one will be willing to work with you or provide you with any sort of capital.  Therefore, you will have incentive to be very careful in how you treat the building, your stock of merchandise, and especially how you treat your employees.  Remember, you aren’t paying them.  They can get along just fine with no money at all so they really don’t need this particular work.  On the other hand, their reputation as good workers who do a good job and are easy to work with is what makes other people want to have them as co-workers.  Therefore, they have a vested interest in doing good things while working with you.  In other words, you are all on the same side, the same team and it’s obvious to all.  You are not in a zero-sum situation because the more money one of you makes the more the others make.  You can’t win if they lose and they can’t lose if you win.

Finally, as a store owner, you can’t lose money.  The worst you can do is make no money at all.  Any money you already have is not at risk.  You don’t need to buy insurance since your business needs no money.  You can’t be sued for money.  You don’t need to provide pensions or medical insurance for your staff.  You don’t have to worry about government regulation since there is none.  So your business needs no payroll office nor any of a host of other expensive, labor intensive, bothersome bureaucratic procedures and processes that produce paper shuffling but do nobody any good (except the person paid to do them!).  And, of course, your business does not have to pay any interest on any loan. Your business has no expenses at all.

*Net Benefit = Overall Benefit – Negative Consequences

How does Copiosis end debt?

ABOLISH DEBT FOREVER.001Credit cards are a blessing while you’re spending.  Credit cards are hell when it’s time to pay.

The average American family owes over $15,000 on their credit cards.  As if that weren’t bad enough, most home owners have a mortgage.  Most of us own cars or lease them. Many of us have student loans. That’s still more debt.

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, 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 Copiosis economy, your debt simply disappears.  It’s gone.  It doesn’t exist any more.  There is no credit and no debt in a Copiosis economy.

How can that be?  How is it that at the transition to a Copiosis economy one’s debts simply are no more?

Money in a Copiosis Economy is not transferable from one person to another nor from one group to another nor from one organization to another.  So even if you kept 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 Copiosis 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 Copiosis society.

 

Demand determines how much is spent.

Simplistically speaking  our economy today 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. This is one of the reasons business refused to hire workers during the great recession.

Those people with money to spend in our economic system 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 in 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 plays a part in creating recessions and depressions.  Our system has created a way to prevent the supply of money from being reduced with a resulting reduction in demand.  That way is credit, loans, debt.  The borrowing of money increases the supply of 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 jobs.)

 

Copiosis changes this

In a Copiosis economy, the supply of money depends only upon the supply of goods and services designated as Luxuries.    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 when spent 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 (for all practical purposes) balance.  Money does not exist independently of the supply of goods and services for sale as it does today.  Therefore, there is no need for credit or debit to help provide motivation for production.  If you produce there will always be money for you to earn.

 

But what about existing debt?

The natural question then is, “well this is great, but what about the debt I currently have?”. Your debt is owned by someone. You have it, but the bank, or credit card company who provided you a loan or credit own that debt you have. The value of that debt to them is the interest you pay as the cost of using their money or their credit. This is why the banks or the credit cards do what they do. To create value which looks like and is huge streams of money returning to their pockets in the form of interest payments.

In today’s economy, the value these companies create is accounted for in their stock price if they’re a publicly-traded company. If they’re a private company, it is represented usually by a multiple of the value of those money streams. We’re going to ignore private company for now and focus on publicly-traded companies..  The process for eliminating existing debt is basically the same for both types of companies.

The stock price represents the value these companies have created in extending you credit or providing you a loan. That value is owned by the stockholders. For example, if a bank is worth $100, and Jane owns 10% of the stock of that company, Jane owns 10 percent of the value of that company. If you have a loan out from that bank, that means, Jane owns a portion of that debt.

At the Transition, if Jane and all the other stockholders are paid in cash for the value of their stock ownership, the company and its stockholders are fully compensated for the value your debt represents to them. The balance of your loan goes to zero and the value of your debt is settled with those who own that value-ladened debt.

Obviously, this is an enormous process that takes place at the Transition. Most industrial nations currently have the smarts and the resources to identify the details needed to make this process happen. It’s not rocket science. In a post-Transition Copiosis Economy everyone is made whole and you are free of debt.