Reciprocal System #580 "The Road to Permanent Prosperity" ch24 Stabilization Methods I C

Transcript

all right helloo hello how is everybody doing tonight welcome to my channel uh this an educational Channel we take a look at Great theories of everything ancient and modern and um try to help you to figure out how to use these things in your own life um we've focused uh for a long time on the ancient Egyptian tree of life and then the reciprocal system of theory from dwey B Larson I would have to say I consider these to be the uh at least for me the two greatest uh theories of everything that have been put out there um we will be covering all kinds of other stuff um and we'll be trying to kind of put them together as well but today is our 580th video that we've done on the reciprocal system of theory from dwey B Larson Mr Larsson was an American engineer who lived in the 20th century he died back in 1990 left behind a lot of great books um especially his three volume uh structure of the physical Universe uh I guess uh Edition two um that includes the book nothing but motion uh which is primarily on Atomic physics and then basic properties of matter which is on chemistry and the universe of motion which is on astronomy the first two of those books uh we've gone through um cover to cover or I think we we I I think we might have skipped the last chapter or two of nothing but motion but um we covered the vast majority of those books here on this channel and then uh I would add to that also larsson's book nothing uh uh larsson's book beyond space and time which uh came up posthumously in the '90s and um that book is on metaph physics uh including sections on um psychology and philosophy and religion dream interpretation um ethics and all kinds of other uh philosophical subjects and a little bit of biology in there as well um we today are um heading toward the end of one of larsson's two books on economics that is called the road to permanent Prosperity um and what's great is Larson's reciprocal system all of his books are based on the same Theory um mostly articulated in his two fundamental postulates um Larson is one of the few scientists to propose um uh uh Universe based upon not matter not energy but motion the universe is made out of motion Larson's first postulate says the universe is composed entirely of one component motion existing in three dimensions in discrete units and with two reciprocal aspects space and time uh now uh Renee deart uh Thomas Hobs um back in the day in the uh 17th 18th century um had these Notions of the universe of motion um in the early 20th century came down to Arthur Edington um Samuel Alexander Alfred North Whitehead all had Inkling of a universe of motion but I believe that uh Larsson was able to make it work U uh by uh defining Motion in a um more rigorous Manner and also uh I guess releasing the controls on motion and defining it in a more generic manner uh Larson defines motion as the relationship between space and time I was running at 10 m per hour 10 miles of space in one hour of time speed speed is space over time but um Larson defines all of our scientific quantities as motions and says that they all can be expressed with a simple fraction with space or time as the numerator and time or space as the denominator so uh with the caveat that space and time can be in multiple Dimensions so you know you you can step out not too far to go to acceleration I drop the rock out the window and it fell at 9.8 m/s squared acceleration is space SP over time to the second power but then uh you realize that Larson is defining energy is a kind of motion matter is a kind of motion force is a kind of motion pressure is a kind of motion electric charge is a kind of motion magnetic flux magnetic permeability uh viscosity fluidity temperature these are all forms of motion and they all can be expressed in SpaceTime terms in fra a fraction that represents a reciprocal relationship which you can see say if I'm saying I was running at 10 mph well let's say double the speed double the speed well then you say I was running I was now sprinting at 20 mph or equivalently you could say I was running at 10 miles per half hour either one is the same you can either multiply the space or you can divide the time that is a reciprocal relationship okay so there's that um and um this provides a great check for um our um overall cosmology or our scientific um you know Reckoning of our units so in larsson's World matter is time to the 3 over space to the thir energy is simply time over space magnetic flux is time squared over space squared pressure is time over space to the fourth power force is time over space to the second power capacitance is space to the third power over time although Larson would disagree with that but uh that is some derivation that uh one of Larson's Associates came up with later um and you know that is another point that you know Larson system is not is a work in progress he's deceased now he only lived to be92 uh and so he didn't finish his work and he made a few mistakes as he intend as he has said uh the system itself is correct whether I have applied the system correctly in all instances is another matter and if I have made any mistakes they will come out in the wash event eventually and uh hopefully that will happen if the reciprocal system isn't uh you know relegated to the dust bin of History which um I'm trying to prevent and I think some other people out there are trying to prevent also so thus uh that's why I've done 580 videos on it so far um now uh where Larson uh uses a generic interpretation of motion is in the motion that he's talking about that the universe is based on is what he calls scalar motion scalar motion is a motion that has a magnitude but it has no specific Direction you can Envision a scaler motion with a balloon that you take a magic marker and put dots on um as you blow up the balloon all of the dots will be moving away from each other every dot will be moving away from every other dot meaning that every dot will be moving in every direction and that is a scalar motion if you contract the balloon all the dots will be moving moving toward each other but in no specific direction another uh so uh scalar motion basically only has uh Direction in so far as it is either in or out but no particular vectorial motion so lson says that the universe is really constructed out of this scalar motion uh this outward motion of that balloon [Music] um is what Larson calls the progression and the progression is omnipresent it occurs at all times in all places um always so wherever you go uh the universe is moving outward at um the rate of one unit of space per one unit of time which is also known as the speed of light and this is always occurring and this is the source for everything in the universe but that Source uh feels like absolutely nothing and uh that source does not manifest until it is reversed and it must be reversed in three dimensions and then it becomes comes the inward motion of that balloon which uh Larson refers to as gravity or at least analagous to gravity and that is the precursor for matter okay now uh in applying all of this to economics uh Larson basically posits an economic system that is based on motion a dynamic system there are really two flows of uh the modern economic system one of the purchasing power and one of goods and uh one is a circular motion and one is a unidirectional motion and um Larson starts from first principles um first is that we need to adopt a scientific approach to economics um this sociological approach of everybody's opinion uh Justice and righteousness and um these kind of things um have to take a back seat to the uh scientific approach uh the economic system has that you design whatever it is needs to uh be in harmony with the laws of the universe or else it is going to collapse just like if you were engineering a bridge or or a building it would collapse if it is not in harmony with the laws of physics and so that's the first thing um and the iron law of Economics is work or starve if you do not produce anything then you do not have anything um and um the reciprocal aspects of the economic system are production and consumption um which are uh evidenced by purchasing power and goods and so Larsson ends up deriving 17 principles of economics that are what he says mathematically exact and uh not subject to change and um works that way um he uh attempts to arrive at a a road to permanent Prosperity through judicious and unobtrusive meddling I guess by the government you know with uh the reservoirs um the storage of a particular um money and that uh there's a boom and bus cycle of the economic system and that's where you get the depressions and recessions and uh what you need to do is you need to lower the amplitude or dampen or stabilize the um amp uh the amplitude of the ups and downs of the cycle so that the ups and downs are just tiny and that your system is just humming along and that is the road to permanent prosperity but that these are independent of the road to Full Employment which is Larson's other book on economics and he says that this is uh a different task um most economists are attempting to solve uh the problem of prosperity by tackling the problem of employment and Larson states that these are two separate things and they have to be dealt with separately okay we're going to try to finish this chapter today this is chapter 24 uh which is on stabilization methods number one and uh this this is really larsson's um prescription for the um uh road to permanent Prosperity um we are going to take over probably 2third of the way through this chapter and uh then um there are will only be two more chapters uh remaining after that all right for some reason probably connected with their orientation toward sociological objectives spending seems to have a peculiar Fascination for The Economist as Viner put it quote it must not be forgotten that spending in itself is for the Spenders the Supreme pleasure it is common practice uh that's end of the quote it is common practice among kyans to extol the merits of government spending and to minimize its disadvantages deficit spending uh explained Burns and Watson is part and parcel of the growth of government initiative and Enterprise as a dynamic element in the economic system but the end of quote but the hazards of unrestricted spending are clearly visible to less Visionary individuals despite the arguments Advanced by the deficit spending enthusiasts it is apparent to anyone who thinks clearly on the subject or who reads the pages of history that spending of borrowed money cannot continue indefinitely even if it did have desirable effects while it lasted governments are no more exempt than individuals from the unpleasant fact that there is a limit to their credit sooner or later that limit is reached and the borrowing must then stop other governments have found this out through painful experience in our case the limit is higher than ever before due to the wealth and productive capacity of the nation but only the very credulous will contend that no such limit exists um there are a bunch of pretty credulous people uh working for our economic uh um you know policy makers currently because there is an entire school of thought of Economics now that just says just print more money but um these people um almost even didn't even uh exist at in larsson's larsson's time in the 80s when he was writing this uh they he he he couldn't even conceive that people would be so stupid not uh only the very credulous will contend that no such limit exists nor can it be avoided by bookkeeping trickery ultimately the Day of Reckoning will arrive the opposition to the free spending school of thought includes a group holding the view that in times of business depression the government should practice rigid economy and should balance the budget by levying sufficient taxes to meet all expenses the econom the economy feature of this program is sound not only during depressions but at other times as well every dollar spent by the government means $1 less for use by individual citizens to meet their own personal needs no government expenditure is desirable therefore from the standpoint of the average individual unless he gets as much benefit from it as he would from spending his proportionate share in his own in his own way a certain proportion of the normal government expenditures obviously meets this test but there is a tendency even in normal times to overload the government pay payroll and in depression periods when other jobs are scarce this overloading approaches the proportions of a national Scandal government economy is a contribution to the general welfare at any stage of the economic cycle but the balance budget Doctrine does not have an equally solid footing the use of credit to meet temporary exigencies is a sound policy a farmer for example should not be expected to live with within his income month by month and Alternate between feast and famine depending on whether or not his crops are in season if he does not happen to have Reserve funds sufficient to take care of the lean months is entirely in order to rely upon credit until he receives the income from his labors government credit operations to meet temporary conditions are equally Justified but borrowing to increase Demand by additional spending is an unsound practice that serves no useful purpose although canes did not stress the point and he may not even have realized it what his prescription for overcoming deflation uh amounts to is to give the economy a big dose of inflation as our findings indicate this is the natural and logical remedy for the disease KES was therefore on the right track but his deficit spending program is not one indivisible um not one indivisible entity that has to be accepted or rejected in its entirety it is a combination of two things borrowing and spending the purpose of the borrowing is to provide an additional money purchasing power flow into the markets to make up for the amount that is being withdrawn from the stream to fill the private money and credit reservoirs the government spending that KES included in his program accomplishes nothing toward this objective while it provokes reactions that are detrimental to the economy both experience and the theory developed in this work emphasize the point that the government's fiscal program for dealing with deflation should not involve any increase in spending all of the benefit that can be obtained is due to the increase in the money purchasing power flow to the markets by reason of the credit transaction no further economic benefit can result from spending this money on unnecessary activities and it is entirely possible that the additional spending will cause secondary reactions that will nullify all or most of the good effects of the increased money flow just as actually happened in the United States between 1932 and 1939 the proceeds of the borrowing should be used exclusively to replace taxation current taxes being reduced by the amount that is brought into the treasury through credit operations when Prosperity returns it will be necessary to raise taxes above the normal levels to compensate for the reductions in times of stress but the total tax load will not be increased as it is where the borrowed money is spent on IND on additional sorry uh as it is where the borrowed money is spent on additional government projects the taxpayers will have the same total amount to pay as if the budget were kept in Balance but they will be able to make the payments at those times when they are in the best position to pay money purchasing power injected into the system through the tax reduction channel does not have the detrimental effect associated with those programs that take from the taxpayers to give to other groups there may be some individual discrepancies but on the whole the taxpayers who get the benefit of the reduction are the same ones who ultimately pay the higher taxes to restore the balance this avoids the unfavorable reactions that result from measures which divert earned income to finance question uh to finance questionable Pro projects or to support able-bodied individuals in idleness the existing pay as you go income tax policy is particularly well adapted to the prompt and effective bolstering of purchasing power by means of government credit operations since a temporary reduction in taxes affects the majority of workers almost immediately and gets the stimulus down to the Grassroots of consumer buying without delay as will be brought out in the next chapter a flexible tax is not necessarily the best of the available means of controlling the business cycle but it is a sound and effective method of accomplishing the desired results and it has one outstanding Merit there is no practical limit to the extent to which it can be used for this reason even if another primary control method is adopted as will be recommended in the conclusion stated in chapter 26 a tax tax adjustment program should be authorized and held in reserve ready to be employed in the event of heavy surges that are beyond the capacity of the primary control mechanism if the control program is put into effect during a time when there is a relatively large imbalance in the money flow which is quite likely since actions toward setting up facilities for keeping out of trouble are usually deferred until we actually get into trouble it will be necessary NE AR to activate the tax adjustment program at the start of the control operation and to continue it until the fluctuations subside to the point where the less drastic measures will suffice it should hardly be necessary to point out that the feasibility of controlling the business cycle and maintaining price stability by government actions either by tax adjustments or by other appropriate measures is predicated on the assumption that what we are talking about is leveling out the fluctuations due to variable consumer expenditures and other non-governmental actions if the government itself is causing the imbalance we are powerless to do anything about the situation as the inflationary actions by the government will have preempted the tools by which stabilization could otherwise be accomplished unless the government can bring its expenses down to the level of its income or Levy enough taxes to bring its income up to the level of its expenses we will simply have to accept the inevitable inflation but the taxpayers would do well to realize that they cannot Escape paying the bill for whatever their government spends if they exert enough pressure to prevent a timid or self-centered government from imposing a large enough tax to cover current expenses this gains them nothing if the deficit is financed by borrowing the taxpayer incurs an interest burden immediately if it is financed by currency expansion the amount of the deficit is automatically added to the market prices for the purposes of this analysis we are presuming that it will be recognized by all concerned that it is futile to talk about measures to stabilize the economy unless the government first puts its own house in order and stops creating the very conditions that we are undertaking to eliminate all right that is the end of chapter 24 stabilization methods one and obviously chapter 25 is called state stabilization methods number two and uh we'll start that chapter tomorrow when we resume um let me just tell you that if you'd like more information on the reciprocal system in general uh check out any or many of my first 474 videos on this subject where I go into the reciprocal system and its postulates and their ramifications and larsson's evolution in a little bit more detail and also uh you can go back in the archives about 7 weeks to get to the start of this book and start from chapter one if you have that kind of interest um also check out my thumbnail um which I sometimes maybe a day late in putting in but uh the thumbnail for these uh later economic videos um have Larson's flowchart for his economic system and so it shows you uh the dynamic uh economic system uh that Larson um schem schematizes um there all right so thanks for tuning in today and have a great