Growth Beats Austerity 100 to 1


Bridge Over Troubled Water - by Cairn

Suppose a team of 10 engineers designs a bridge that spans a body of water connecting two small towns and cutting 1 hour off the alternate route for 14,000 people per day.  Over the 75-year life of that bridge, those 10 engineers are responsible for 380 Million hours of increased productivity.

At 25 dollars per hour per person whose time is saved, 10 engineers create nearly 10 billion dollars of NEW VALUE.  As such, only 100 engineers and a 10 bridges could create the same amount of New Value as Facebook is worth in an IPO.

Now compare the Old Value of the engineers.

Suppose that during the course of those same engineers’ careers, they could each borrow (capitalize) around 1 million dollars in personal debt for cars, homes, credit cards, and family education – debt that they would need in their lifetime.

By the miracles of the fractional reserve system, their 1 million dollars may be multiplied into 10 million dollars of new money available to the financial system for distribution.  As such, those same 100 engineers would be worth approximately 1 billion dollars as economic beings in the Old Value economy.

100:1 Ratio

So in review, 100 engineers are worth 100 billion in New Value versus only 1 Billion dollars in Old Value.  Of course, I purposely picked an example that would make the numbers come out all nice and orderly, but the most important point is that New Value leverages Old Value by several orders of magnitude.

Only two possible outcome of the global debt crisis.

1. The first is for all the countries of the world to get together and lop 3 zeros of the global accounts balance sheet and reboot.  As such; 40 Trillion dollars becomes a quaint and manageable 40 Billion dollars.  If it happens quickly, that’s called hyperinflation.  If it happens slowly, that is called Austerity.

2. The second outcome is currently raging in Europe today with austerity protests toppling governments in France and Greece with the idea of growth vs. austerity.  New candidates are promising to “grow” the economy out of its crisis.  While this may be a bold and populist idea that is sure to spread, nobody knows exactly how it will be implemented without triggering number 1.

The New Value Movement:

By making so called “intangibles” tangible, vast amounts of  New Value can be added to global accounts balances which could stave off wholesale collapse of the financial system.  This will not be without hardship for some people; social priorities must drive Wall Street priorities, not the other way around.

We don’t have a financial crisis, we have a value crisis.  One thing is emerging as a certainty, new value leverages old value by several orders of magnitude  and The Value Game provides the capitalist model to access this astonishing wealth creation  – in case anyone is wondering.

Leave a Reply

Your email address will not be published. Required fields are marked *