what we really need to go into space

> I do not float through circles of finance - remember, I am a humble Third
> Worlder software engineer :-) - but nevertheless I believe there are only two
> economic systems stable through long timescales (millennia):
>
> 1) Capitalism.
> 2) Primitive communism (which would be the kind of "economic" system in
> primitive, hunther-gatherer societies).
>
> As far as we know, only (1) can support technological civilizations; the
> tentatives of implementing forms of communism and socialism in
> t-civilizations failed after a few decades. There are several proposals of
> "intermediary" systems that would be neither capitalist nor communist, but my
> gut feeling is that they are all doomed to fail because they always assume
> that society will follow a pre-defined, unchanging set of rules and have some
> form of "good will" and work "for the collective". But individuals, societies
> and even species are ultimately driven by fundamentally selfish behaviors,
> and any deviation from the selfish behavior usually losses the competition
> and gets extinct.

You have a good point. Although, every system we actually see is
something of a hybrid -- if for no other reason than a minimal level of
poverty maintaining welfare keeps the masses from revolting.

The following page is a little too nutty (even for me :-) but I thought
this excerpt amusing and perhaps a even pointing in a tiny way to a
truth in terms of the space settlement and this discussion:
http://www.whale.to/b/desborough.html
"It was JFK's space program which sounded the economic death-knell for
the Western nations. Until that time, the geopolitical clout of Western
nations primarily had been derived from the profits of the narcotics
trade and industrial growth. In 1963, NASA placed a contract with
Tavistock to determine the effects of the aerospace industry on Western
society. The Institute found that the space program had so ignited the
imagination of the public, that the Western world was in danger of
becoming a technological society, replete with many free-thinkers. If
allowed to continue, this trend would cause the Illuminati to lose its
dominance over the populace. So alarmed were the Illuminati that they
convened a conference in France; the conference concluded that in order
for the Illuminati movers and shakers to continue their dominion over
the masses, the populace of Western nations must be brainwashed into
accepting the de-industrialization of their countries.
Deindustrialization was accomplished by culturally shocking the masses
into accepting the formation of vast environmental agencies staffed with
parasitic bureaucrats."

While I don;t believe in that conspiracy theory, ultimately, the
viewpoint is where does one fall one the scale of "rationing" in a world
of technologically produced abundance? What commodities should be
rationed? And how should the rationing be done?

US style capitalism relies on ration units represented by "Federal
Reserve Notes". These are pieces of paper and related electronic
credits issued by essentially private banking companies (yes, they are a
little public as entities, too). See this for how this idea got
involved with the American Revolution:
http://www.xat.org/xat/moneyhistory.html

In any case, do things really need to be rationed these days, with any
form of currency? If not, then that means space enthusiasts would have
all the resources they need to devote full time to make space
settlements happen. James P. Hogan's novels suggest the time has passed
for rationing. Obviously, most people disagree, and that leads to a
certain hegemonic power structure.

Funny thing is, the banks themselves don't work that much by rationing.
Here's a little essay I wrote on this (which shows where to get money
for space settlement). This at least is a hybrid compromise -- using the
a capitalistic economy's money supply itself to fund such public works.

==== Tapping Fred's hidden money supply =============

There is a mysterious investor in the US world economy. This investor
has put almost twenty trillion dollars into the US banking system. For
want of a better name, let us call this investor "Fred".

Twenty trillion dollars is a hefty chunk of change. This is enough to
wipe out the entire $7 trillion in US debt, and have money left over for
rebuilding US transportation infrastructure, employing artists and
writers to make free works, rebuilding schools, funding drug research
into free cures, and providing universal free health care to all US
citizens. It is even enough money to do these things worldwide. And, it
is even enough money to do theses thing in space by creating space
habitats using Asteroids, or on the Moon, or on Mars.

Now how much interest is Fred earning on this investment? You might
think it would be something quite high -- after all Fred has enough
money to buy and sell any set of major banks. But, for some reason, Fred
gets no interest on this investment. That's right, Fred has almost
twenty trillion invested in the capitalistic US economy, and doesn't
want a penny of interest! Guess when you have that much money, a couple
hundred billions of dollars a year in interest doesn't really mean much
anyway.

Now, our Uncle Sam is a friend of Fred. In fact, you could say, Fred got
his money from our Uncle Sam. How did he get it? Inherited it? Married
into it? Stole it? Well, hard to say exactly -- let's just say, Fred got
involved with some very smart and very greedy people, and Uncle Sam,
being a kind and generous soul, gave Fred the money to help bail Fred out.

But here is the problem. Uncle Sam is now running a little short on cash
-- about $500 billion a year. But rather than ask Fred for any of the
money back, Uncles Sam just borrows the money from the same people who
were leaning on Fred. So, not only do these people get Fred's money
interest free, they actually loan it back to Uncle Sam, and Uncle Sam
pays interest on it!

Who is this mysterious investor we named "Fred"?

Well, Fred stands for "Fractional Reserve Electronic Debt". It's a real
thing, although it may be called differently. It represents most of the
money supply in the US. This money has been created by allowing banks to
only maintain a "fractional reserve" for any debts they create. That is,
essentially, if a bank had a dollar deposited in it, it can loan out a
ninety cents worth. It only has to keep ten cents on the dollar
deposited in it according to legal requirements, in case the borrower
wanted their money back. Thats the "fractional reserve" of a fraction of
the deposit kept in reserve for repayment. Then that ninety cents is
deposited in another bank, which need to keep about nine cents in
reserve, and that bank can loan out about a eighty one cents. This goes
on and on. This works out to being about ten dollars that really gets
loaned out for every dollar bill (likely printed by the US Treasury at
some point) that gets put into a bank in the first place. All these
imaginary dollars exist as what could be considered "electronic debt".
The sum total of all this electronic debt is close to twenty trillion
dollars. Banks pay no direct interest on electronic debt they create
privately. Is this a good deal for people who own banks? You bet it is!
Almost all their working capital is imaginary electronic debt they
create themselves at no interest.

But wait, you say, isn't the United State Congress the only people with
the authority to print money? Absolutely. But they have delegated this
to private banks -- for no return at all. This is the greatest long term
swindle in history. And all Uncle Sam has to do to get the money back
given to Fred is just pass one law. But surely this will cause inflation
you might ask? After all, we've all been taught in school that printing
money causes inflation. Well, that's only half true. Printing money can
cause inflation, but only if more money is printed than commerce really
needs. Right now, commerce in the US needs about twenty trillion
dollars. And it is already out there. So, the US can reclaim it at the
stroke of a pen. However, over time, as Uncle Sam spends, or grants, or
loans this money into private hands, those private recipients will
likely demand interest on this money they deposit, and then banks will
have to raise their interest rates on new loans to account for paying
interest on this newly deposited funds. Since deposits now get typically
only one or two percent interest, that means banks collectively will
have to charge about two hundred billion dollars more of interest to the
general public to pass along this increase in operating costs -- or
essentially, the interest rate on all loans will go up in the same
amount of whatever these new deposits expect in interest. However, since
the money supply needs to grow by several percent a year to keep up with
economic growth, the US, now in control of its own money supply again,
can print physically or electronically this amount of money -- probably
about $500 billion dollars a year. So this means that tax rates can be
much lower -- so overall, the average borrower will be better off
because even at higher interest rates, they will save twice as much on
taxes. So -- everyone wins, except for any bankers squeezed between what
they need to pay depositors for interest and what they can charge for
loans. Old long term loans like mortgages might pose a problem as their
interest rates can't rise. So would banks that just can't attract new
deposits because of poor customer service or other reasons. Also, there
would no longer be government bonds which are considered an absolutely
safe investment -- so rather than sitting on guaranteed incomes, anyone
with cash to invest would have to do some research on safe investments
and potentially take more risk. But, that might be very good for the
stock market and the economy overall.

--Paul Fernhout

Text of the "Tapping Fred's hidden money supply" essay hereby released
into the Public Domain