The economy in any given location, can be likened to the dynamics of water. If the water in a river flows, then the river is healthy, life thrives in its waters and supports the surrounding terrestrial ecosystems.
Water evaporates from the Earth’s surface, transforms into clouds, travels with the wind, and lands in a new area where it can support life.
When water stagnates, it can become stale. Bacteria and disease start brooding and life stops thriving. Water, and more specifically flowing water – is an essential element and resource in sustaining life.
In our society, we have made the primary element that supports life: ‘money’. If you have money, you can eat, you can drink, you can live in a nice house, you can educate yourself, you can start new ventures, you can support a family, you can participate in leisure time. Money is used, and money is spent – and each expense in turn becomes a flow of income for someone else in society.
Money like water – can be stored for the future. Water-grabs in the form of excessive damming can threaten the vitality of an entire ecosystem: as water is held back, not enough water flows and the area that was once supported by its flow is now faced with a condition of lack, resulting in the degradation of the environment. Dams, when properly regulated and monitored, can be a beneficial factor in the environment. In the same way, we know that saving money can be beneficial to get us through a future ‘rainy day’. However, when we hog money, like water, we create averse conditions within the economic environment (=ecosystem) around us.
The Marginal Propensity to Consume, Save and the Multiplier Effect
Within the realm of economics, you may sometimes hear of the term ‘multiplier effect’ and ‘marginal propensity to consume’ or ‘marginal propensity to save’. Although these terms sound daunting, their meaning is actually very simple.
All these above-mentioned terms, relate to changes in the economy when an influx of income (and resulting spending) occurs.
Whenever we have money/an income, we will tend to save some of it and spend the rest. The amount we spend in contrast to how much we save for each unit of additional income, is our ‘marginal propensity to consume’ (MPC). If our MPC is 0.8, then this means that for every additional increase of income, we will spend 80% of it. In turn, the ratio of how much we save over how much we spend for each additional unit of income, is our ‘marginal propensity to save’ (MPS). If our MPC was 0.8, then our MPS is 0.2, which means we will save 20% of any additional income.
When you have little money, your propensity to save will be very low as money will primarily be spent on everyday needs. As your income goes up, your propensity to save will go up as you feel secure enough to ‘put something away’ and still be able to tend to your everyday needs. Once you’re well off, you will be more likely to save a higher portion of additional increments of income, leading to a lower marginal propensity to consume.
The multiplier effect, refers to an effect in the economy where an increase in spending will bring about a ripple effect which results in a greater amount of value as an outcome than the initial amount spent. In a way, one can look at it as ‘returns on an investment’. Here, we can go back to the example of the river, where additional flowing water in a river is not just ‘additional water’. It is also the drinking water for animals downstream whose presence is absolutely vital to the local biome [See ‘How Wolves Change Rivers’ to see how a change in a single variable can have a huge impact]. The same way, money spent in the economy is not just ‘some money spent’, but also the income of another human being who in turn can utilize this income to employ the services of someone else and again contribute to someone’s livelihood.
We can see from the following excerpt, that these propensities matter when it comes down to economic health and vitality:
“Wall Street banks handed out $26.7 billion in bonuses to their 165,200 employees last year. That amount would be enough to more than double the pay for all 1,085,000 Americans who work full-time at the current federal minimum wage of $7.25 per hour.
Purveyors of luxury goods always welcome the Wall Street bonus season, but a raise in the minimum wage would give America’s economy a much greater boost. To meet basic needs, low-wage workers tend to spend nearly every dollar they make. The wealthy can afford to squirrel away more of their earnings.
All those dollars low-wage workers spend create an economic ripple effect. Every extra dollar going into the pockets of low-wage workers, standard economic multiplier models tell us, adds about $1.21 to the national economy. Every extra dollar going into the pockets of a high-income American, by contrast, only adds about 39 cents to the GDP.”
This article nicely illustrates the power of money movement, and where this ‘current’ is the strongest.
By bringing Living Income Guaranteed into the economic picture, we can bring in a gush of fresh new water and transform our stagnant pool into a thriving flowing river. Besides fulfilling our moral duty towards our fellow men through securing each one’s Basic Human Rights, we also put into motion a new economic drive from which will sprout new opportunities of innovation and entrepreneurship.
It becomes possible to have a nice life and to enjoy the latest comfort and tech that science and creativity have to offer, whilst simultaneously making sure that everyone’s livelihood is guaranteed. The principle behind an economy like this is really a simple one: Give, as you would like to Receive.
By changing the money composition in the economy by a fraction, we can bring about tremendous changes. These changes in turn, will bring about their own effects. Even if one might not agree with a Living Income Guaranteed for political reasons, we cannot ignore the ample economic benefits that are coupled with its implementation; to name but just a few: economic growth and expansion, higher living standards, better skilled labor force, lower debt levels and better employment conditions. These in turn translate into social, cultural and psychological benefits such as lower crime rate, lower levels of stress, increased personal freedom, social cohesion, enhanced personal growth and development and overall happiness.
Let’s unleash the wave of economic, social, cultural and personal potential with Living Income Guaranteed.
There seems to be a misunderstanding about the word sedition. Sedition is to cause harm or to undermine a government. A government is the citizens representing themselves, no matter what system is utilized at the end of the day, which is what the government represents: the citizens. Therefore, any action that is taken to undermine the wellbeing of the citizens in a country – for instance causing poverty or diminishing resources, causing harm to the citizens of a country = that would be sedition and that is how it should be approached.
Sedition certainly is not when one exposes abuse by your government representatives that they should be held accountable and what they do should be transparent and therefore, one needs to re-look at the word ‘sedition’ carefully.
The media as a medium with which the citizens communicate and educate themselves to be effective in supporting each other to have a country that is economically and financially effective. The media should thus be owned by the people of the country and never only by certain individuals. No policy should ever be allowed that damages the country because to do that, is to in fact act in a way that is detrimental to the wellbeing of the country and by definition would be – if we have lawyers with some common sense – the premise for treason. And that is why the police force will exist, that’s why the commercial units will exist is to investigate those that do damage the Economy and to the Human Rights of the people. That’s what police’s purpose actually is, the purpose of the police is not to protect the rights of the wealthy, is to protect the rights of the citizen, to ensure that there is nothing that is happening that will cause unemployment that will cause people to live on the streets – that’s a crime!
We have a very strange criminology, justice, economic, political and an education system. Now teachers cannot even work out the basic common sense of what it is that they are supposed to teach the children, because our curricula are not designed to support Human Rights.
We have no lawyers standing-up and doing something about it, we have no economists standing-up. Instead we have all kinds of presentations and proposals to bring about a better world without any clear understanding of how the system really functions, which must even place into question all our activists.
The propaganda of the media and all the systems that now manage the ideologies of the mind, are deliberately diving the human into the idea of ‘free choice’ and into the idea that apparently ‘you must have your own opinion.’ Opinion is never fact, study facts – don’t ever allow yourself to form an opinion, an opinion is never real: it is an illusion – facts are real.
We are currently existing under a form of a very strange capitalist democracy where we don’t have majority rule, we have minority rule. And this is done through propaganda where the actual scientific research, the actual considerations and common sense necessary to manage a country and ensure that its citizens are well cared for, are deliberately misdirected. This is why for instance, the media should belong to the citizens, because the media is the medium through which the education of the citizens of a country happens, to ensure that they act responsibly. As an example, to vote for minority rights that are going to cause starvation and poverty is not going to solve the problem. One should vote for Human Rights that ensure that there is an equitable distribution of value that ensures that everyone has a decent life.
We have to really question the quality of our leadership, the quality of our academics and our researchers, the quality of our media and the quality of our economists – they all seem to be deliberately creating a world of poverty, identifying ‘autonomous forces’ to be what determines prices, which is what creates a lack of understanding so that the majority of the population keeps on missing what’s really going on. The reality is that only a few are making and being protected by all the money, while the majority is lost in translation when it comes to understanding economic theories that lack practical and tangible common sense.
Within a Living Income Guaranteed System we suggest that this word sedition is what it truly means: anyone that undermines the wellbeing of the citizens to bring harm to people in general, causing them financial distress, causing the economy to not be balanced and effective to support the people, purely for the purpose of making profit = that is sedition and treason, and must be treated as such.