Sage Advice - What are the True Principles for Making the U.S. National Budget? (3/6)

Only a Capital Budget Is Consistent with True American Culture 

Many recognize that the morale of our population was crushed by the recent reign of the Anglo-Dutch System. In the former productive industrial and manufacturing economy, one wage earner sufficed for a good living.  Families blossomed as attentive parenting was valued as the highest social skill.

We used to have a mission of building a better future for our children than what we experienced in the present.  When John F. Kennedy challenged the entire American population to go to the Moon and the population rallied and accomplished that.

Then, as science was truly taking off in ambitious projects to live in and modify the cosmos itself, it all was stopped.  We are now, based on the vision of Donald Trump, JD Vance, and Elon Musk, reliving and reinventing that moment. 

Because of the intervening ruin of our economy and culture, this change, involving wholesale leaps in science, technology, and the skills of our labor force is necessary for our survival as a nation. Simply catching up China based on the existing menu of technology will not do if we are to overcome the decimated economy and labor force created over the last 50 years. We need to invent and support the upscaling of the next level of technology.  What change in the Congressional budget process must accompany that?

Here again is Lyndon LaRouche: 

The primary feature of any form of society congruent with the essential distinction between man and beasts, is the society's reigning, practiced emphasis on the human individual's intrinsically sovereign, cognitive powers. These are the powers which are, at the least, the potential which is associ­ated with each and every individual human mind. That is the power expressed by a sovereign individual mind, a power of the universe, thus comparable to universal gravitation, which is expressed as Vemadsky's dynamic principle of the Noo­sphere. This is expressed in its effect on the individual human mind, but in no other species. It is expressed as the act of discovery of a universal physical, or equivalent principle, a power which is expressed as the functional distinction be­tween the human individual and all other forms of living species . . . 

That notion of creativity, as we shall consider the point here and now, is the moral and scientific principle upon which our republic's adopted commitment to long-span capital budgeting is implicitly premised.

That definition of the development of the sovereign cognitive powers of the individual mind, underscores the most es­sential point of difference between competent economics, based on this notion of the sovereign powers of human cre­ative cognition, which are the expression of any true principle of individual, human personal freedom; and the opposing view, which implicitly defines a society self-doomed to a great catastrophe, unless it mends its ways in time. . . 

Ironically, when the USA has put men triumphantly on the Moon, the changes in leading trends of moral and economic thinking which had already been expressed by the re­volt of the 68ers, had produced a culturally diseased condition which, by the beginning of the 1980s, had already caused our national economy to undergo a pathological change in reigning principle; this change was a cultural-paradigm downshift, a change which had unleashed a process which had been destroying more and more of the underlying policies of practice on which the original Kennedy manned-landing mission had been premised and achieved. . . 

Socie­ties based on Anglo-Dutch Liberalism, for example, are typical of cultures morally inferior to our own constitutional order, and are not actually republics in the specific sense of the U.S. Federal Constitution. This feature of our Constitution is to be recognized as the same anti-Locke principle of Gottfried Leibniz, which the circles of Benjamin Franklin, Thomas Jefferson' s mentor for that occasion, introduced to the U.S. Declaration as "the pursuit of happiness." These and kindred connections are most notable for their bear­ing on the design of policies of economic recovery urgently needed for our acutely troubled U.S. economy today.

The Monetary System Must Serve the Physical Economy’s Technological Progress

 The idea of a system of value as associated with a money­ system, is a hoax and a delusion. Value lies only in the physical form of the economic process as a whole. However, the organization of the combined effort of the society as a unit, requires a system of regulation which guides the participating members of the society in the direction of the desired, combined, future effect. This is required, to the end of promoting the development of the process, as a whole, for both the present and future benefit of the population as a whole, in effect. 

The required system of micro-management of the small, for the sake of the future advantage of the whole, relies largely on a system of credit which subsumes a money-system. The astonishing, world-shaking success of the system of regula­tion instituted under President Franklin Roosevelt, provides excellent illustrations of the way in which a modern credit­ system may provide the means for channeling individual initiatives to the needed effect on the future condition of the society as a whole.

During the 1950s, this sort of regulation in the small for the sake of the whole, was known by such titles as the "fair trade," as opposed to "free trade," system. If the U.S. is to outlive the presently onrushing financial­ economic storms in progress, a return to the "fair trade" concept must be instituted now. . .

In other words, the successful management of the present in the small, must proceed from an efficient comprehension of the future destination to be approached. Society must know the boundary-condition which encompasses the present eco­nomic and related systems, and be guided by navigation fo­cussed upon that quasi-astrophysical boundary-condition of negotiation in physical space-time, rather than by the incompetent mechanistic-statistical, implicitly flat-Earth forecast­ ing methods derived from the failed dogmas of Descartes.

A "fair trade" system, so defined in respect to known boundary conditions, requires a relatively  fixed-exchange­ rate monetary-financial system. Predominantly, the boundary conditions are defined in terms of the relevant scientific principles which determine new technologies and their processes of development.

This fixed-exchange-rate rule is needed to ensure that the effective rate of financial charges on essential long-term in­vestments in progress, must be lower than the tolerable margin of return on investment derived in the process of production and distribution of essential goods and services. For, if currency values fluctuate, this fluctuation, in and of itself, will prompt effective interest-rates and related charges to creep upward, with the effect of tending to ruin the economy at large.

A balance must be struck, in favor of physical rates of return on long-term capital investment in production and basic economic infrastructure, while allowing a reasonable charge for credit uttered by the banking and related financing systems. In other words, the standard must be set to conform to the needs and goals of a producer society, rather than the presently reigning moral and economic decadence of a rentier society, the economic decadence typified in the extreme by the former Enron and the present pandemic of hedge-fund swindles.

In our history, the needed balance has been best supplied by aid of commitment to national banking systems, as providing the framework within which private banking operates. Currently, this reform is needed to deal with a situation in which the Federal Reserve System as a whole is, virtually, hopelessly bankrupt, and must be placed in Federal receivership, under Federal management, to ensure the essential, unin­terrupted, functional role of the private banking system. We can not permit a collapse of the credit system, but must actually increase the supply of carefully directed credit-issuance supplied to ensure net physical growth of productive employment and output, per capita, and per square kilometer, throughout the nation as a whole.

Federal protection for the essential elements of the private banking system, is now indispensable, if a deadly, uncontrollable panic, is to be prevented. The credit-system created to cope with the present crisis, must be a long-term system, intended to operate within a global, fixed-exchange-rate system, and that over a forward period of about two generations: fifty years. This would be established as a kind of echo of the intended objectives of the original Bretton Woods system, with suitable adjustments of design to fit both contemporary and visible forward condi­tions.