Some time ago there were heaps of self help books on various topics, like, Universe for dummies, Religion for dummies, Orgasm for dummies, Your Brain for dummies.
Witchdoctor has detected that his latest essay and solutions on solving the debt driven economy inequality was not properly understood. So, in the quest for constant human progress for dummies, here is the simple version.
The solution in the post is a simple cookbook accounting double book keeping recipe.
First, it has nothing whatsoever to do with any type of a Sovereign Fund, like the ones in Norway or in the Gulf Oil States. In this recipe, nobody buys shares, buys out a company, invests, makes loans, or gives money for free. That is all possible, but this recipe is totally different.
It has nothing to do with nationalizing the sectors of economy. That is a different and completely legal approach. It has nothing to do with giving loans by the State to the business.it has nothing to do with free money injections into a private sector.
It has nothing to do to giving tax rebates, detaxing the business in a classic way.
Today the neoliberal economy is based on taxation,and since there is ,in a competitive global deregulated market, a race to the bottom by reducing taxes and so producing growing Debt on behalf of the State- State deficit = net spending.
The whole economic and political game is how to reduce taxation of the business for being more competitive, how to pay less the workforce and how to dismantle the welfare State based on taxes.How to square the circle without revolts and riots and how to suck out the profit in any form.
For the Witchdoctor recipe you need this ingredients: The State, A Central bank, A treasury, which is called in Europe the finance ministry, and a Public Bank.
Now, you can change the names of this three and for example call them all Mickey Mouse for dummies. A Public Bank, the Treasury with the Central Bank enters into a business company.
We know that currently the business sector in Europe pays overall around 40% of taxes in various forms.
The Public Bank proposes to a private, or any type of ownership business company to enter into its ownership as a nominal sum entry. It does not gives loans, buys shares or gets a piece of ownership. It is a kind of mortgage without any strings attached.No voting rights, no management rights , no selling rights. It is just an entry in a ledger.
The entry is proportional to the agreed sum of taxes which are swapped between the Public Bank and the company. The sum of taxation, up to the 40% , forms a nominal entry ledger of the Public Bank.The company swaps the taxes to be paid for a nominal formal or virtual ownership part of the Public Bank.
Any taxes, even the cost of health and pension taxes for the workforce paid to the State health and pension funds.
So, company becomes tax free in return of a nominal ownership part of the Public bank in the Company capital and assets.
There is only one string attached. The 80% of the profit that the Company makes has to go back to the company capital in any form of productive investment.And there are no dividends of any type permitted.
Now, for dummies. In this recipe, the company will be glad and happy to pay as much taxes as the State thinks it is right, since more taxes make more tax free nominal- no ownership right- entry of the Public Bank in the company capital.
In this way the Company is capitalizing itself in a big boost. In fact this is the way how to boost the company capital, for “free”.
Witchdoctor knows there are lots of his Chinese readers out there. They will be, lets make a bet, the first ones to understand. The Europeans, they are the dummies without buying a book, even for free!.
The Public Bank, after a short while, owns a lot of assets.It has a nominal entry ledger in the companies and loads of taxes as assets.
The Treasury swaps this assets with the treasury bills with the Public Bank.
The State gets taxes swapped between the Public bank in return of the nominal entry into the company and the companies are tax free!
The result is: The State gets all taxation, the Companies are tax free and the Public bank is full of treasury bills.Or change names, the central bank instead of the Public bank, or, spread the swapping further more and lets play now the game between the Central bank and the Public bank… HA? Maybe next time….
What to swap next?
Since self employed, arts, music, crafts people have no capital requirements, they can, along with others , like research, swap Intellectual property or, Intellectual Potential, a category of property that includes intangible creations of the human intellect.
The swap is the same, the Public bank makes a nominal entry ledger in the Intellectual property established by the law as the intangible capital of any self employed ( even for a dummy ? Yes, The university is already full of them so are the parliaments, the EU,etc), in exchange for taxation or for health and pension taxes.
Overall, one can swap anything….. It is a double entry book keeping and that is all.
As the Oligarchy invented the swaps and derivatives, the Public Bank and the State can Always Outswap them. Swap them swiftly up the arse.
This recipe for dummies is for the green transition, it is fast, very fast and maybe we can catch the last train.
The housing and building swap in this post is different. In making a green transition, The Public bank pays all useful work for changing buildings into zero emission property and gets a nominal entry,a no strings mortgage ledger as a Public bank asset,without ownership decision rights .
But one can use it also for oil, plastic, dumping radioactivity, or whatever other reason to shorten the life on earth.
The Conclusion. The Maxwell Daemon and the 2nd law of Thermodynamics.
This Swap is essentially a , probably bad Witchdoctor copy of the Maxwell demon Principle. But, if you know better and more democratic one, say it. Witchdoctor has in previous posts outlined the straightforward debt free money model, this is a recipe how to, in the same debt driven framework, achieve the almost same result. Yes, it is clever, thanks Witchdoctor, we will do it ASAP. My ass.
The Maxwell demon is always sitting out of the box where the 2nd law of thermodynamics makes its sad course, but by this Perpetuum Mobile intervention it lowers the disorder and makes the human race live longer on the planet. The shift out of disorder produced by the Demon is another story, it is not pertinent for this recipe for dummies.
Thanks, and this concludes the whole …… about this dummies.
Witchdoctor
PS, you can amend it or do it better, let me see….
Last sigh; The new vaccine against covid 19 in Russia is called Sputnik, Remember how the Russians sent dogs in the Sputnik capsule into the space to test the Sputnik? Almost all dogs died, and it was a terrible death. All went mad. Barking Mad.
Leica, the only survivor, returned Barking Mad,Testing Sputnik.