Humanitarian Government: Part 4, Part 2 of Economic Primer
Section 4
Good day, and this is part two of getting everyone who reads this on the same page as to terminology and/or explanations.
Yes, it’s going to be very much like a history lesson, but…money, finances, and even governmental systems have been around almost as long as humans have been around. So, I’m going to jump in. Part 1 will dip your toe in slowly, so if you don’t want to be pushed into the deep end, I suggest starting with Part 1.
Issue (repeated from Part 1)
Before I get into anything, I’m going to take the time to define some terms. They’re in use today, but may be determined by me in different ways or contexts. Some will be common words, like ‘money’, while others will be socio-economic and governmental systems and descriptions, and there might even be new terms I come up with.
I say socio-econ-governmental systems for a specific reason: when people interchangeably use terms like ‘Socialism’, ‘Marxism’, ‘Communism’, and such, I need to spend the time necessary not only to clarify but to teach. Those terms I mentioned? They share similar features but can be quite different. Those who lump them together are like mixing ‘oranges’, ‘tangerines’, ‘tangelos’, ‘grapefruit’, and saying they are all the same thing. If anyone has firsthand experience with that variety, they can attest to their differences. They may all be citrus, but they are also very different. Additionally, another essential facet is often overlooked: everything, every little thing, is interconnected.
Definitions
Federal Reserve (1, 2, 3, 4): AKA ‘The Fed’. It’s the central bank of the US and was established in 1913 in the hopes of providing a stable monetary and financial system. Its job is to manage the country’s monetary policy, regulate banks, and ensure economic stability. It has three parts: the Board of Governors, which is in D.C. and consists of seven members appointed by the President. Certain things have to happen, by the way, to allow a President to fire any member. The second part is the Federal Reserve Banks. Those carve up the U.S. into twelve districts located in major cities. Each has its own nine-member board of directors. The third is numerous U.S. banks that are required to own specific amounts of non-transferable stock in whatever regional Federal Reserve bank they are either located or assigned, and I’ll throw in here advisory councils.
In today’s world, a certain someone is trying to take over the Fed. Possibly (cough cough probably) because it’s independent of the Executive and Legislative branches of the government. However, it does not receive funding that has to be approved by Congress. Not only that, it’s set up to insulate it from being controlled on whims: every member of the board serves over a span of multiple presidential and congressional terms. Guess what? If it’s taken over — that’s all gone —interests can be set that will explode inflation and give billionaires just one more tool that will generate more money than it already does.
Trade Credit (5,6): This is a loan extended from one trader to another for goods and services that are bought on credit. Things like supplies are just one of those things and doesn’t require immediate payment. It’s a form of short-term financing….and not based solely on financial standing, either. Goodwill is part of that deal, too. There are various forms this takes, but I’m going to use the KISS principle: whenever I say ‘Trade Credit’, it’ll mean any form it takes.
This kind of credit, too, is a critical source of capital for a great many businesses. Based on my sources, here’s an example. Trade credit for a major retailer with W-M in its name has a trade credit that is eight times the amount of capital invested by shareholders and is a larger source of capital than bank borrowings.
Consumer Credit (7, 8, 9): This is essentially a loan with a capped limit, featuring regular payments set at a minimum amount and no repayment schedule. Home Equity Lines of Credit is one, and credit cards are another example. This is the revolving credit system. Almost everyone knows this form.
Open credit is another form of Consumer Credit that comes in. You get a utility bill at the very least, right? Or a cell phone? These are forms of Consumer Credit. That sort of credit is used and billed later, requiring full payment each month.
The last type is Installment Credit. Based on today’s economy, cars, student loans, and personal loans all fall into this category. Its facets are that it has a specific amount that is given as a lump sum and repaid over a set timeline with fixed monthly payments.
Some things I agree on needing credit for. But buying food or paying utilities on a credit card isn’t one I agree with. Not to mention the need for a credit score anymore to function. Needing a credit score for housing (other than buying a house) is just shy of a way of making a person homeless, which then forces a person to either live at home (which then feeds into home life and more) or try to find ways to gain a permanent street address (not P.O. Boxes) to get employment.
See what I mean? The system is fairly rigged, so you work at whatever job or jobs to pay for necessities and nothing more. If businesses want to complain about low birth rates, they need to re-examine financial reality and structure to give people incentives to have children.
Credit Score (11, 12, 13): A significant yet insidious aspect of the financial world is the infamous Credit score. All this does is supposedly show your creditworthiness and how likely you are to repay borrowed money.
This is where Consumer Credit comes in: it’s based on your credit history, payment history, outstanding debts, length of having credit, types of credit accounts, and recent credit inquiries. So, if you’re looking for an apartment and inquiries are done, you might want to think about where you want to go really hard and keep your inquiries as few as possible.
This three-digit number typically runs from 300 to 850. Based on what I found, 800 and above is exceptional credit, which earns you the best rates for more or other credit and better terms. Seven hundred forty to seven hundred ninety-nine is a ‘very good’ range, offering shorter benefits, including more favorable interest rates for any line of credit. You want the next one? OK, if you want to be known as a dependable borrower and aren’t fussy about whatever rates you get, strive for a 670-739 credit score.
Now the horrible news: most Americans fall into the following two categories: 580-669 and below 580. The first indicates potential issues with money/debt management and has a higher credit rate (most likely, rarely, or never). The last means you struggle not only to gain credit, but what you do get is at a higher risk to lenders because it carries a higher interest rate.
Based on the normal costs of everything, credit is becoming more and more a necessity rather than optional. That means that money (and I’ll get into more on this) needed for daily living is now not only taxed to gain but also charged for use. Go figure on how that’s sustainable.
Credit Theory (also known as Debt Theory) (14, 15, 16): Richard Wolff, a Marxian economist. In economist circles, he’s known for his economic methodology and class analysis. His views state a few things about credit. He claims that when credit is extended, essentially, the banks create money out of nothing. This is contrary to what is generally said about banks and credit, which is that banks act as an intermediary between savers and borrowers. If his view is ‘true’, then what happens to those who extend credit? Well, let’s look: a ‘normal’ person takes out a loan or charges on a credit card. Interest is paid on the amount you’ve borrowed in addition to the money that was lent out. Essentially, you’re paying the banks back non-existent money that some sort of accounting magic says is real, in addition to whatever said accounting magic says you owe for that magic trick. Interesting that.
Now, this isn’t much different than the official theory, but with key differences that gloss over others. In official theory, money in the form of credit says that money functions as a promise to repay a debt. In ways, I can see that. Remember me saying something about paper money, fiat currencies, and nothing backing them up? Bingo. ‘Money’ being some sort of promissory note makes sense. There is another section of thought that says money arose to facilitate barter. Again, I can see this. When you’ve something that equals to something else, that’s more of a specie or commodity currency with physical expressions.
Now, here is my rub on this term: formal theory states that money creation coincides with debt creation. That is the issue I have, because it also states, like Wolff, that credit creates new money from thin air.
Either way, trust is a massive part of the equation: they give you what you need, and you promise to pay back.
Demurrage Money (17, 18, 19): This is a type of depreciating money or a form of stamp scrip, typically in paper form. This type is specifically designed to gradually lose purchasing power at a constant rate. This isn’t inflation, though, but it does the same: it causes money to lose value. The economic effects are vastly different, however. Demurrage is supposed to be only a temporary store of value. A proponent of this was the German-Argentine economist Silvio Gesell. Maynard Kynes, a very well-known economist in some circles, also said that the idea was sound, but he also had criticisms of the currency. In what I found, using this (in Gesell’s terms) Freigeld (‘free money’ as the term in his demurrage model) would increase the velocity of money, eliminate inflation, reduce unemployment, lead to fewer recessions, and possibly create an interest-free economy. I won’t go further into this, though. It goes into details that go into the inner issues of the economy (nitpicks). If you want to study this more, I suggest monetary usage in Ancient Egypt, the European High Middle Ages, and the Great Depression. A more recent example is the Chiemgauer, the only regional currency that uses demurrage, which is used in Prien am Chiemsee, Bavaria, Germany, and was created by Christian Gelleri in 2003.
Producer Price Index (formerly or AKA as Wholesale Price Index) (20, 21 ): You might have heard this as a ‘big deal’ in the news recently (just to note, this was written in early September 2025). This ‘little’ measurement tracks the rise or fall of prices received by domestic producers for their output. This monitors over 16,000 establishments providing something like 64,000 price quotations. All that data is routed through (drum roll, please) the U.S. Bureau of Labor Statistics (BLS). Yeah, the very same office that had recently had a head that gave out less-than-stellar job market figures at the beginning of August. She got paid back for honesty (final numbers always follow raw data and can be raised or downgraded; this didn’t affect anyone’s thinking who was following the party line for now) by being fired. My take (which is very close to the real meaning) is that you add together costs for labor (wage and benefits), the costs of each little widget or raw material, costs for management, and profit…creating the price of an item. Usually, any increases aren’t absorbed by whatever entity is making whatever. That means when the item you’re buying goes up, the PPI has gone up (usually), and you’re eating the costs. Congratulations, you’re in the 90% that gets hurt the worst.
Profit (22 ): I’ve probably mentioned profit several times between Part 1 and this one. This insidious item isn’t bad in and of itself. It’s the ones that set profit expectations and how they create those profits that I have a problem with. For me, that extra from the price of any given thing after paying all expenses (to include taxes, interest, materials, and other financial obligations) can still exist. But not like it is today.
In my views, and I’ll stress again I’m no specialist in anything except how to survive a changing world, that ‘profit’ isn’t just a corporate item. It’s also from increases in paybacks from bonds, stocks, and savings. I would even ‘warp’ this somehow to include a baseline and up income that does some hinky things now with ‘income’.
That hinkey-ness is simple: a person takes out money as a loan with some sort of minor collateral that they’d be willing to part with if things changed. Currently, our tax system allows a certain amount of those loans to be tax-exempt. With the miracle of accounting and tax law, very little of that is noticed as ‘income’, and of course, that way, no taxes go to the government. Sometimes, they get a refund. To those of you making more than 500,000/yr. In my perfect world, simple accounting would be paramount, and there would be taxes and
According to my word processor, this entry is now six pages long. I’m cutting off for now. So yes, *sigh* there will be a third entry coming up sooner than this one. I’ve got more of an actual outline now than the freethinking and research as I go.
Sorry, all about my methods. I do the same in my fiction writing, and even that (for what some might call ‘fluff’), I do a ton of research. I’ll finish up terms next, then comparative government, which will be the following article. So stay tuned.
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FOOTNOTES
(1) https://duckduckgo.com/?q=federal+reserve&atb=v496-4&ia=web&iax=about
(2) https://en.wikipedia.org/wiki/Structure_of_the_Federal_Reserve_System
(3) https://www.federalreserve.gov/aboutthefed.htm
(4) https://en.wikipedia.org/wiki/Federal_Reserve
(5) https://en.wikipedia.org/wiki/Trade_credit
(6) https://duckduckgo.com/?q=trade+credit&atb=v496-4&ia=web
(7) https://duckduckgo.com/?q=consumer+credit&atb=v496-4&ia=web
(8) https://duckduckgo.com/?q=consumer+credit+types&atb=v496-4&ia=web
(9) https://corporatefinanceinstitute.com/resources/commercial-lending/types-of-credit/
(10) https://duckduckgo.com/?q=credit+score+and+why+need&atb=v496-4&ia=web
(11) https://duckduckgo.com/?q=credit+score+range&atb=v496-4&ia=web
(12) https://money.usnews.com/credit-cards/articles/what-are-the-credit-score-ranges
(13) https://www.experian.com/blogs/ask-experian/infographic-what-are-the-different-scoring-ranges/
(14) https://duckduckgo.com/?q=Richard+Wolff%2C+economist%2C+views+on+credit&atb=v496-4&ia=web
(15) https://duckduckgo.com/?q=richard+wolff%2C+economist%2C+%27money+for+credit+doesn%27t+exist%27&atb=v496-4&ia=web
(16) https://en.wikipedia.org/wiki/Richard_D._Wolff
(17) https://duckduckgo.com/?q=demurrage+money&atb=v496-4&ia=web
(18) https://en.wikipedia.org/wiki/Demurrage_currency
(19) https://en.wikipedia.org/wiki/Chiemgauer
(20) https://duckduckgo.com/?q=producer+price+index&atb=v496-4&ia=web
(21) https://en.wikipedia.org/wiki/Producer_price_index
(This was initially posted on WhiskyLeaks, written by The Midnight Goddess Nyx handle. This has been edited for grammar and/or spelling on 06 September 2025 by the author. Humanitarian Government is a multi-part blog-ish proposal for a new governmental system that involves social and economic facets. All thoughts are from the Author and may not be welcomed by all, but I, the author, am open to input and critique. I’m not a lawyer or any other pure specialty. If any legal or specialty information is incorrect, I WANT people to correct me. Somehow get in touch with me. I’m on YouTube and am working on a video series. If I find out I need to add something like an email or something to contact me, I’ll add it to future postings.)