The Financial System and Money Supply

Of course, one could just as easily argue that a larger surplus would inevitably lead to higher profits. Honestly, you can manipulate the data to show whatever correlation you want between profit margins and either a deficit or a surplus—it’s all about how you frame it. The fundamental issue here is that we are starting from the flawed assumption of identity.

Maria Thomas48 said:Here is a similar, pretty intense example. Some kid was using eBay to trade up from a single item, swapping one thing for something better and better. He went pretty far in a short amount of time, but the end result was incredible. So, who won and who lost in that scenario?

Bartering isn't really what this sub is for. It just boils down to the whole "chicken or the egg" argument. There are way too many variables affecting the price of any single product. Like weather, how long production takes, whether the workers are skilled, scarcity—like a two-headed chicken, I guess. Talking about this is kind of pointless.

This is a serious discussion with a mathematical foundation, and there are some really interesting and useful conclusions you can pull from it.

What’s your take on this?
If you head down to a local farmers market and pick up a bag of apples for $1.75, who really wins in that scenario? Is it you, or is it the vendor?

Andrew Booth29 said:Heh...

Look, I’m sticking to my guns here: deficit equals twice the profit—and since you seem to need things laid out clearly, I’ll prove it using your own logic:

Total expenses + profit + government spending + deficit = total tax revenue + total income

Now, if we plug in my premise:

Total expenses + profit + government spending - 2 * profit = total tax revenue + total income

Which simplifies down to:

Total expenses - profit + government spending = total tax revenue + total income

Since we know that profit is just total income minus total expenses, let's rearrange it:

Government spending = total tax revenue + 2 * profit

Now, take this next equation:

Government spending = total tax revenue - deficit

When you set them equal to each other:

Total tax revenue + 2 * profit = total tax revenue - deficit

Cancel out the total tax revenue from both sides:

2 * profit = - deficit

😂

Eq1 and Eq2 are only true in one single scenario, which is when "Total Profit" = 0

If you subtract Eq2 from Eq1, you get:

"Total Profit" + "Total Profit" = 0

which simplifies to: "total profit" = 0

So, basically, every substitution that differs from my result leads to the exact same solution: "total profit" = 0.

No, what you actually end up with is this:
2 * profit + deficit = 0

Andrew Booth29 said:Of course, one could just as easily argue that a larger surplus would inevitably lead to higher profits. Honestly, you can manipulate the data to show whatever correlation you want between profit margins and either a deficit or a surplus—it’s all about how you frame it. The fundamental issue here is that we are starting from the flawed assumption of identity.

The main point I'm making is that you can prove there's no need for a deficit—provided that deficit is funded by primary issuance—that matches the actual value of the profit. Basically, the government can look at how much profit is being generated, realize it's overvalued, and then scale the deficit back down to a realistic level. Naturally, if there's a money deficit caused by excessive profits, some entities might end up losing out or missing out on those profits entirely. In my math model, I'm assuming these entities build their profits in a way that prevents their money from being devalued against currency parity. So, there's a lack of greed for profit here. If people get too greedy for profit, it just ends up wiping out the less profitable players.🙂

Maria Thomas48 said:Here is a similar, pretty intense example. Some kid was using eBay to trade up from a single item, swapping one thing for something better and better. He went pretty far in a short amount of time, but the end result was incredible. So, who won and who lost in that scenario?

Bartering isn't really what this sub is for. It just boils down to the whole "chicken or the egg" argument. There are way too many variables affecting the price of any single product. Like weather, how long production takes, whether the workers are skilled, scarcity—like a two-headed chicken, I guess. Talking about this is kind of pointless.

This is a serious discussion with a mathematical foundation, and there are some really interesting and useful conclusions you can pull from it.

The question was incredibly straightforward. There were four possible answers: Family A, Family B, nobody, or everyone. I never asked about pricing, climate, or labor skills. Let's just ask the families who walked away ahead.

Family A: That trade was amazing. This corn will serve us well, and we got it for only 50 chickens!

Family B: It went great! Now we can finally eat meat since we have more corn than we know what to do with!

What do you say to that? These two silly families both think they profited from the trade, even though we all know from your logic that one family had to lose. Strange families indeed...

This whole debate is just beating a dead horse. It would be like me trying to argue medical science without knowing a single thing about medicine, only for doctors to tell me I'm talking nonsense and should go read a textbook, while I insist I'll reach the answer through pure logic and math...

First off, you haven't actually proven anything here... If you want to make a point, try setting up an equation where profit equals surplus—then we can talk about proof. Any supposed link you think exists between profit and a deficit or surplus can be demonstrated quite simply by applying these identities.
Secondly, there’s absolutely no mention of the money supply in your argument... Even if you had managed to prove that the government requires a surplus or a deficit (which, let's be honest, you haven't), you still haven't shown that printing money is a necessity to achieve that. A deficit or surplus can exist without any change to the money supply whatsoever.

Andrew Booth29 said:First off, you haven't actually proven anything here... If you want to make a point, try setting up an equation where profit equals surplus—then we can talk about proof. Any supposed link you think exists between profit and a deficit or surplus can be demonstrated quite simply by applying these identities.
Secondly, there’s absolutely no mention of the money supply in your argument... Even if you had managed to prove that the government requires a surplus or a deficit (which, let's be honest, you haven't), you still haven't shown that printing money is a necessity to achieve that. A deficit or surplus can exist without any change to the money supply whatsoever.

So, regarding that solution you floated about the budget deficit... basically, you're saying a deficit is just negative profit. That’s how you see it. It's a simple equation, I guess. Profit minus everything else. Or rather, when things go south, you end up with a deficit. It's a direct mathematical link. Just a flat assertion. Simple enough.

It won't work if you try to make the total revenue equal the sum of all transaction costs. It just doesn't add up that way.

A Total revenue plus total taxes collected equals total expenses plus the state’s cost. It's just basic math. Everything flows in one direction. You add up all the money coming in from everyone, then you add the tax haul, and that has to balance out against what everything costs to run, including whatever the government spends on its own overhead. Simple equation. Just numbers on a ledger.

It’s pretty obvious when you look at:

I don't know. It feels like things are just shifting. Everything is always moving, isn't it? People talk about change like it's this big, dramatic event, but mostly it's just quiet. Just small pieces sliding around. I was thinking about that the other day while watching the news. It's all very constant. Very steady in its instability. Anyway. That's just how it seems to me. kaže:
Total costs plus profit plus what the government takes minus twice the profit equals the total tax amount plus total revenue. It just balances out that way. Simple math.

The difference between equations is...

Profit equals zero. That’s just how it stands. It’s a flatline. No gain, no loss, nothing moving on the ledger. Just sitting there. Zero.

It’s been proven in the end. That whole thing only works as a solution when the profit hits zero.

A The equation is just the middle step of my proof. Once you plug in the assumed result, everything lines up perfectly. It’s logically sound. At the end of the day, what one person calls revenue, someone else just sees as an expense. That's just how it works.🙂

It’s kind of a bummer. When you finally get proof of something, you realize it all just comes down to staring at math equations. That's really it. Just equations.

To make the equation balance out properly. I don't have any text to work with yet. Please provide the posts you want me to rewrite. The profit has to be adjusted to match the deficit. It’s just how it works. Everything will balance out because that's what the math dictates. Simple as that. AThe government can decide to run a bigger deficit if they want, but there's a catch. If that extra spending doesn't actually result in enough growth to cover the gap, you end up looking at a weaker dollar. You basically end up printing money that isn't backed by real wages or actual economic productivity. It’s a simple thing, really. In terms of currency parity, it just triggers inflation. That's how it works.

Proof. I think we should talk about this more. It feels like things are moving too fast lately. Everyone is rushing. I don't know. Sometimes you just need to sit back and look at the big picture. It’s important to stay grounded. People get carried away with the noise. They shouldn't. It's better to be steady. Just an observation. The sum of all profits equals the budget deficit. It implies that...
If everyone’s goal is to ensure that everyone turns a profit, then every single individual profit stays above zero. If you take all those positive profits and add them up, the total amount of money available to actually be realized in cash depends entirely on whether the federal budget deficit is large enough to cover it. It's just math, really.

A budget surplus can happen when the government collects more in taxes than it actually spends. It basically results in an overall negative profit margin for the state. That leftover tax money is just proof that those funds were pulled right out of the system during that specific period.

It’s honestly just a bit depressing, looking at how much primary money is being pumped in just to cover up those planned deficits. It feels like we're constantly trying to fill a hole that was dug on purpose.

It’s pretty obvious that if you’re going to take out loans to cover a deficit, you eventually need the budget to swing back into a surplus—and a bigger one at that, just to account for all those interest payments. Looking at the data, it follows that this would mean...

1. You have to pull out more cash than what was actually put in through a deficit. Basically, you end up running a budget surplus for several years straight just to compensate, which only makes the whole imbalance even worse. It's a mess.

2. It seems pretty foolish for a government to go out and take on debt when they could just use a primary issuance instead. If you do an issuance like that, it’s actually backed by newly created value—basically, actual profit. You have this new value standing right behind the money. It increases the amount of liquidity in circulation, which then allows for real savings. And once you have those savings, you can actually use them to build up the nation's prosperity.

I’m just going to say it again. The government actually has the option to trim the deficit. If they do that, they can stabilize the exchange rate between our new currency and everything else out there, both domestic and foreign. Sure, making those kinds of moves creates some friction in the system. It’s never perfect. But honestly, I’d much rather deal with a series of small, manageable bumps in the road than the massive, sudden cliff we seem to be heading toward right now.🙂

Good grief... My method for demonstrating the relationship between profit and deficit is absolutely sound. There’s a derivative right there at the top—so go ahead, try to find the error. You won't.

There are countless different values that can satisfy that initial equation, depending entirely on how you balance the profit against the deficit or surplus. You can verify this yourself just by plugging in some numbers.

Douglas Reed3 said:The question was incredibly straightforward. There were four possible answers: Family A, Family B, nobody, or everyone. I never asked about pricing, climate, or labor skills. Let's just ask the families who walked away ahead.

Family A: That trade was amazing. This corn will serve us well, and we got it for only 50 chickens!

Family B: It went great! Now we can finally eat meat since we have more corn than we know what to do with!

What do you say to that? These two silly families both think they profited from the trade, even though we all know from your logic that one family had to lose. Strange families indeed...

This whole debate is just beating a dead horse. It would be like me trying to argue medical science without knowing a single thing about medicine, only for doctors to tell me I'm talking nonsense and should go read a textbook, while I insist I'll reach the answer through pure logic and math...

Well, you wanted to relativize values. That’s just blurring the logic. So I took that direction. You can compare two products based on worker productivity. But even then, you still have to account for worker expertise and the capital tied up in production. I could have added all that too, but I left you some room to continue blurring things.

Regarding expertise. How can anyone claim to be an expert if they can't even convey their knowledge in a basic way to someone else? Secondly. Do you really think you'll be able to fix a remote control just by studying the basics of electrical engineering, digital integrated circuits, microprocessors, electrochemical power sources, and electromaterial technology? You'd need similar literature if you wanted to fix a radio, a blender, or anything else. Basically, you need to be an expert in a forest of literature—theory—combined with a certain amount of practice—before you can tell a layman what to do to actually solve a problem.

The topic is actually quite serious. Money is one of the pillars of capitalism and is central to economic events. If we don't understand where new money comes from and why, how can we ever fully grasp other economic laws? Telling someone they have no clue without providing a real answer is pretty unprofessional.

Math is an exact science, and economics uses math as a tool. Just like physics. In physics, you can even prove that if you know an object's velocity, there's a specific uncertainty in its position, and vice versa. You know, the Uncertainty Principle. However, if you want to say I have no idea or that something isn't right, then disprove the mathematical claims like Somied did. Okay, I messed up a little because I didn't spot his error immediately. And it was obvious. Because once you plugged in the wrong solution, the equations just looked wrong.

Besides, I limited the scope to proving the necessity of money inflow and, if no one refutes the evidence with more accurate equations, proving that the current moves in the US are leading the country toward ruin. Or maybe we disagree on that too. Perhaps this situation and whatever follows in the coming years is exactly what we need.

Look, people have been arguing for 18 months now about whether or not to devalue the currency. The answer is clearly visible in my evidence. There would be money, and I wouldn't devalue, if everyone were actually producing things (working instead of just importing and trading) and if precise, earmarked issuance of dollars occurred through budget deficits specifically for the state's cumulative profit. And of course, if there wasn't all this massive profit created by sheer greed for money. You see new evidence of that greed every single week. And then people act surprised at what others come up with to grab cash without doing any actual work.🙏

Andrew Booth29 said:Good grief... My method for demonstrating the relationship between profit and deficit is absolutely sound. There’s a derivative right there at the top—so go ahead, try to find the error. You won't.

There are countless different values that can satisfy that initial equation, depending entirely on how you balance the profit against the deficit or surplus. You can verify this yourself just by plugging in some numbers.

So, if you're deciding right now that your equation is just derived... well, then that's that. It’s a thing. It's established. You've reached that point where the math just sits there. It’s done. I guess everything follows from there. Everything. S That’s right. And that's my take on it too. A If you're wrong, you’re going to have to retake that math exam. Seriously. My logic holds true for every single value of the "profit sum"—it always equals the "budget deficit." Your version only works if the total profit sum hits exactly zero. Or, to put it another way, it only applies when there isn't a budget deficit or a surplus at all. It just doesn't work otherwise.

A Total expenses for all entities plus government spending equals the total amount of taxes collected plus total gross revenue. It’s just how the math works out. Everything balances.

S Total costs plus profit plus what the government takes minus two times that profit equals the total tax amount plus total revenue. It just works out that way. Simple math. Everything balances if you look at it right.

Equations. Just equations. It’s funny how people get worked up about them. Some see a problem, some see a puzzle. I just see lines on a page. You look at one variable, then another, and suddenly you're trying to balance everything out. It feels like life sometimes, honestly. Trying to make sure both sides match up perfectly. But math doesn't care about your feelings. It just exists. One side equals the other. Simple, really. Or not simple. Depends on how much coffee you've had. I don't have any text to work with yet. Please provide the posts you want me to rewrite, and I will get to work immediately. It’s just basic math. In a closed system, the total revenue—counting both individuals and the government—has to equal the total expenditure. There's no way around it. It’s an absolute certainty. One person's income is simply another person's expense. It works that way. You can't argue with the numbers.

I don't really see how you can explain an equation like that. It just doesn't work. S Unless we're looking at a total profit of zero.
Sure, a deficit can happen. It just happens. Sometimes you look at the numbers and they aren't there. It’s just one of those things that occurs. kProfit. Any amount at all. I don't know what you need me to work on yet. Just send over the posts whenever you're ready. I'll be here. It always comes out to a zero deficit because the profit is zero too. Based on what you’re saying, it would imply that if you divided profit by deficit, you could just pick any number you wanted—like 2 or whatever. That doesn't work. It's mathematically broken. Zero divided by zero is undefined. You can't just assign a specific value to it at any point.🙏

Good grief, where on earth are you getting that from? My formula only holds up if—and I’ve already demonstrated this—the deficit equals twice the profit.

And then there's you, lacking both the profit and the deficit figures required to actually make your argument stick. How exactly do you account for that?

Andrew Booth29 said:Good grief, where on earth are you getting that from? My formula only holds up if—and I’ve already demonstrated this—the deficit equals twice the profit.

And then there's you, lacking both the profit and the deficit figures required to actually make your argument stick. How exactly do you account for that?

I'm just breaking it down by balancing the total income against the total expenses. Here’s how that looks:

Subject — 1 — 2 — 3 — State — Description of the state item
--------------------------------------------
Income... it’s all just numbers on a screen, really. Three percent, four percent... just bits of tax revenue trickling in from the federal government. It doesn't feel like much when you look at it that way. Just small increments. Steady, I guess. Low-key.
Expenses... just sitting there at 2... 2... 2... then jumping up to 7. Most of that goes toward buying stuff from a specific vendor. Just how things are going.

Total Revenue equals 9.
Total expenses came out to $6. Just six bucks. Totaled it up and that's where I landed. Nothing fancy. Simple enough.
Net profit for the entity equals 3. It's just basic math, really. Nine minus six leaves you with three. Simple enough.

Total revenue plus taxes equals 13. That’s the sum of all expenditures plus what the government takes. It just balances out like that. Simple math. Everything adds up to 13.

The national deficit is basically just math. You take four and subtract seven and you get negative three. It’s pretty straightforward like that. Simple subtraction. That's how the numbers work out.

The math is pretty simple when you look at it. You take the total profit from all private businesses and add that to the state deficit. It’s basically just zero. Everything balances out in the end. Simple as that.

Is this okay? It’s basically an isolated system. The only real factor at play here is the budget deficit being driven by overspending relative to tax revenue.

But that logic only holds up if you assume that a deficit equals profit—which simply isn't true in a general sense. Just look back at the very formula you started with.

What you were actually trying to prove was this... You started from these basic identities:

pears + apples = pears + apples

Then you claimed:
In the specific case where pears = apples,
we have:
pears + pears = apples + apples
2 pears = 2 apples / (*1/2)
Therefore, pears = apples. Which we already knew, because that was our initial assumption. And based on that, you concluded that:
pears + apples = pears + apples *only* if pears = apples (which is a flawed conclusion).

Let’s get back to the fundamental equation:
"Total expenditures of all entities" + "Total profits of all entities" + "Government spending" + "Budget deficit" = "Total taxes collected" + "Total gross revenue"

100 + 20 + 30 + 10 = 40 + 120
160 = 160

So, a surplus of 10 and a profit of 20. Based on your twisted logic, am I to understand there can be no profit without a government surplus? 😂
profit = 120 - 100 = 20 -> checks out
government spending = taxes - deficit = 40 - 10 = 30 -> checks out

Your starting equation actually stems from the following:

1) Government spending = taxes - deficit (since you're treating the deficit as a negative value)
2) Profit = gross revenue - gross expenditure

When you write out the equations, they look like this:
1a) government spending + deficit = taxes (that works)
2a) gross expenditure + profit = gross revenue (that also works)

By adding 1a) and 2a), you arrive at your original equation.

Equations 1) and 2) are independent variables as you've set them up. There are infinite solutions to these equations for any possible relationship between deficit and profit that satisfies all your conditions.
If you pick one highly specific scenario—which is exactly what you did—of course it will fit the equations. However, that is by no means proof that it *only* works when your specific scenario is met. In fact, I just demonstrated that it works in at least one other case as well. That alone is enough to dismantle your claim that profit cannot exist without a deficit.

That’s all from me.

Maria Thomas48 said:Well, you wanted to relativize values. That’s just blurring the logic. So I took that direction. You can compare two products based on worker productivity. But even then, you still have to account for worker expertise and the capital tied up in production. I could have added all that too, but I left you some room to continue blurring things.

Regarding expertise. How can anyone claim to be an expert if they can't even convey their knowledge in a basic way to someone else? Secondly. Do you really think you'll be able to fix a remote control just by studying the basics of electrical engineering, digital integrated circuits, microprocessors, electrochemical power sources, and electromaterial technology? You'd need similar literature if you wanted to fix a radio, a blender, or anything else. Basically, you need to be an expert in a forest of literature—theory—combined with a certain amount of practice—before you can tell a layman what to do to actually solve a problem.

The topic is actually quite serious. Money is one of the pillars of capitalism and is central to economic events. If we don't understand where new money comes from and why, how can we ever fully grasp other economic laws? Telling someone they have no clue without providing a real answer is pretty unprofessional.

Math is an exact science, and economics uses math as a tool. Just like physics. In physics, you can even prove that if you know an object's velocity, there's a specific uncertainty in its position, and vice versa. You know, the Uncertainty Principle. However, if you want to say I have no idea or that something isn't right, then disprove the mathematical claims like Somied did. Okay, I messed up a little because I didn't spot his error immediately. And it was obvious. Because once you plugged in the wrong solution, the equations just looked wrong.

Besides, I limited the scope to proving the necessity of money inflow and, if no one refutes the evidence with more accurate equations, proving that the current moves in the US are leading the country toward ruin. Or maybe we disagree on that too. Perhaps this situation and whatever follows in the coming years is exactly what we need.

Look, people have been arguing for 18 months now about whether or not to devalue the currency. The answer is clearly visible in my evidence. There would be money, and I wouldn't devalue, if everyone were actually producing things (working instead of just importing and trading) and if precise, earmarked issuance of dollars occurred through budget deficits specifically for the state's cumulative profit. And of course, if there wasn't all this massive profit created by sheer greed for money. You see new evidence of that greed every single week. And then people act surprised at what others come up with to grab cash without doing any actual work.🙏

I asked a simple question. It couldn't have been any more straightforward than that. I wasn't interested in worker productivity, skill levels, or capital investment. My only question was whether both families actually benefited from the trade they conducted. If there were no profit in it, they certainly wouldn't have made the exchange. One family wouldn't trade if it meant taking a loss. As far as I'm concerned, buying a bushel of apples for... $1.75 I’m passing on them; I wouldn't buy them if I were anyone else. If I eventually decide to pick up a pound of apples, then that pound of apples will be worth more to me than... $1.75 Just like the merchant says... $1.75 It is worth more than his bushel of apples... we both stand to gain from this exchange...

Maria Thomas48 said:Well, you wanted to relativize values. That’s just blurring the logic. So I took that direction. You can compare two products based on worker productivity. But even then, you still have to account for worker expertise and the capital tied up in production. I could have added all that too, but I left you some room to continue blurring things.

Regarding expertise. How can anyone claim to be an expert if they can't even convey their knowledge in a basic way to someone else? Secondly. Do you really think you'll be able to fix a remote control just by studying the basics of electrical engineering, digital integrated circuits, microprocessors, electrochemical power sources, and electromaterial technology? You'd need similar literature if you wanted to fix a radio, a blender, or anything else. Basically, you need to be an expert in a forest of literature—theory—combined with a certain amount of practice—before you can tell a layman what to do to actually solve a problem.

The topic is actually quite serious. Money is one of the pillars of capitalism and is central to economic events. If we don't understand where new money comes from and why, how can we ever fully grasp other economic laws? Telling someone they have no clue without providing a real answer is pretty unprofessional.

Math is an exact science, and economics uses math as a tool. Just like physics. In physics, you can even prove that if you know an object's velocity, there's a specific uncertainty in its position, and vice versa. You know, the Uncertainty Principle. However, if you want to say I have no idea or that something isn't right, then disprove the mathematical claims like Somied did. Okay, I messed up a little because I didn't spot his error immediately. And it was obvious. Because once you plugged in the wrong solution, the equations just looked wrong.

Besides, I limited the scope to proving the necessity of money inflow and, if no one refutes the evidence with more accurate equations, proving that the current moves in the US are leading the country toward ruin. Or maybe we disagree on that too. Perhaps this situation and whatever follows in the coming years is exactly what we need.

Look, people have been arguing for 18 months now about whether or not to devalue the currency. The answer is clearly visible in my evidence. There would be money, and I wouldn't devalue, if everyone were actually producing things (working instead of just importing and trading) and if precise, earmarked issuance of dollars occurred through budget deficits specifically for the state's cumulative profit. And of course, if there wasn't all this massive profit created by sheer greed for money. You see new evidence of that greed every single week. And then people act surprised at what others come up with to grab cash without doing any actual work.🙏

Do you really expect people on this forum to download thousands of pages of study material and hundreds of hours of lectures into your head instantly? Not only that, but after everyone has kindly explained that trading—outside of rare cases like options, futures, or gambling—is essentially a zero-sum game where one person loses just so another can win... you still insist on ignoring everything. You trip up on the very first lesson of supply and demand from an intro economics textbook, yet you claim you're ready to tackle macroeconomics and the Federal Reserve...

Maria Thomas48 said:Well, you wanted to relativize values. That’s just blurring the logic. So I took that direction. You can compare two products based on worker productivity. But even then, you still have to account for worker expertise and the capital tied up in production. I could have added all that too, but I left you some room to continue blurring things.

Regarding expertise. How can anyone claim to be an expert if they can't even convey their knowledge in a basic way to someone else? Secondly. Do you really think you'll be able to fix a remote control just by studying the basics of electrical engineering, digital integrated circuits, microprocessors, electrochemical power sources, and electromaterial technology? You'd need similar literature if you wanted to fix a radio, a blender, or anything else. Basically, you need to be an expert in a forest of literature—theory—combined with a certain amount of practice—before you can tell a layman what to do to actually solve a problem.

The topic is actually quite serious. Money is one of the pillars of capitalism and is central to economic events. If we don't understand where new money comes from and why, how can we ever fully grasp other economic laws? Telling someone they have no clue without providing a real answer is pretty unprofessional.

Math is an exact science, and economics uses math as a tool. Just like physics. In physics, you can even prove that if you know an object's velocity, there's a specific uncertainty in its position, and vice versa. You know, the Uncertainty Principle. However, if you want to say I have no idea or that something isn't right, then disprove the mathematical claims like Somied did. Okay, I messed up a little because I didn't spot his error immediately. And it was obvious. Because once you plugged in the wrong solution, the equations just looked wrong.

Besides, I limited the scope to proving the necessity of money inflow and, if no one refutes the evidence with more accurate equations, proving that the current moves in the US are leading the country toward ruin. Or maybe we disagree on that too. Perhaps this situation and whatever follows in the coming years is exactly what we need.

Look, people have been arguing for 18 months now about whether or not to devalue the currency. The answer is clearly visible in my evidence. There would be money, and I wouldn't devalue, if everyone were actually producing things (working instead of just importing and trading) and if precise, earmarked issuance of dollars occurred through budget deficits specifically for the state's cumulative profit. And of course, if there wasn't all this massive profit created by sheer greed for money. You see new evidence of that greed every single week. And then people act surprised at what others come up with to grab cash without doing any actual work.🙏

The Federal Reserve handles primary money issuance through open market operations involving securities. Secondary issuance occurs via banks using the money multiplier. Imagine the Federal Reserve injects $333 and sets the reserve requirement at 20%. That cash ends up in a JP Morgan Chase account where you deposit $333. JP Morgan Chase takes your $333, $67 and holds them as required reserves, then issues $267 in credit to someone else. In this way, we turn our initial $333 into 1,800... and as banks continue this cycle, we eventually reach $1667 in total money supply.

Maria Thomas48 said:Well, you wanted to relativize values. That’s just blurring the logic. So I took that direction. You can compare two products based on worker productivity. But even then, you still have to account for worker expertise and the capital tied up in production. I could have added all that too, but I left you some room to continue blurring things.

Regarding expertise. How can anyone claim to be an expert if they can't even convey their knowledge in a basic way to someone else? Secondly. Do you really think you'll be able to fix a remote control just by studying the basics of electrical engineering, digital integrated circuits, microprocessors, electrochemical power sources, and electromaterial technology? You'd need similar literature if you wanted to fix a radio, a blender, or anything else. Basically, you need to be an expert in a forest of literature—theory—combined with a certain amount of practice—before you can tell a layman what to do to actually solve a problem.

The topic is actually quite serious. Money is one of the pillars of capitalism and is central to economic events. If we don't understand where new money comes from and why, how can we ever fully grasp other economic laws? Telling someone they have no clue without providing a real answer is pretty unprofessional.

Math is an exact science, and economics uses math as a tool. Just like physics. In physics, you can even prove that if you know an object's velocity, there's a specific uncertainty in its position, and vice versa. You know, the Uncertainty Principle. However, if you want to say I have no idea or that something isn't right, then disprove the mathematical claims like Somied did. Okay, I messed up a little because I didn't spot his error immediately. And it was obvious. Because once you plugged in the wrong solution, the equations just looked wrong.

Besides, I limited the scope to proving the necessity of money inflow and, if no one refutes the evidence with more accurate equations, proving that the current moves in the US are leading the country toward ruin. Or maybe we disagree on that too. Perhaps this situation and whatever follows in the coming years is exactly what we need.

Look, people have been arguing for 18 months now about whether or not to devalue the currency. The answer is clearly visible in my evidence. There would be money, and I wouldn't devalue, if everyone were actually producing things (working instead of just importing and trading) and if precise, earmarked issuance of dollars occurred through budget deficits specifically for the state's cumulative profit. And of course, if there wasn't all this massive profit created by sheer greed for money. You see new evidence of that greed every single week. And then people act surprised at what others come up with to grab cash without doing any actual work.🙏

One must know how to apply mathematics within economics. When you write an identity—an equation—it must actually make sense. If you make an assumption, it must be logical. You cannot simply write banana + egg = car and try to prove that a banana equals a car minus an egg.

Andrew Booth29 said:But that logic only holds up if you assume that a deficit equals profit—which simply isn't true in a general sense. Just look back at the very formula you started with.

What you were actually trying to prove was this... You started from these basic identities:

pears + apples = pears + apples

Then you claimed:
In the specific case where pears = apples,
we have:
pears + pears = apples + apples
2 pears = 2 apples / (*1/2)
Therefore, pears = apples. Which we already knew, because that was our initial assumption. And based on that, you concluded that:
pears + apples = pears + apples *only* if pears = apples (which is a flawed conclusion).

Let’s get back to the fundamental equation:
"Total expenditures of all entities" + "Total profits of all entities" + "Government spending" + "Budget deficit" = "Total taxes collected" + "Total gross revenue"

100 + 20 + 30 + 10 = 40 + 120
160 = 160

So, a surplus of 10 and a profit of 20. Based on your twisted logic, am I to understand there can be no profit without a government surplus? 😂
profit = 120 - 100 = 20 -> checks out
government spending = taxes - deficit = 40 - 10 = 30 -> checks out

Your starting equation actually stems from the following:

1) Government spending = taxes - deficit (since you're treating the deficit as a negative value)
2) Profit = gross revenue - gross expenditure

When you write out the equations, they look like this:
1a) government spending + deficit = taxes (that works)
2a) gross expenditure + profit = gross revenue (that also works)

By adding 1a) and 2a), you arrive at your original equation.

Equations 1) and 2) are independent variables as you've set them up. There are infinite solutions to these equations for any possible relationship between deficit and profit that satisfies all your conditions.
If you pick one highly specific scenario—which is exactly what you did—of course it will fit the equations. However, that is by no means proof that it *only* works when your specific scenario is met. In fact, I just demonstrated that it works in at least one other case as well. That alone is enough to dismantle your claim that profit cannot exist without a deficit.

That’s all from me.

Well, they got the sign wrong for the deficit. Here is the actual result.

100 + 20 + 30 - 20 = 10 + 120

20 - 20 = 0 Profit + deficit

And my example was fine. Why didn't you notice the deficit was negative there? Attached is an elegant mathematical proof in just five lines.🙂

I didn't mess up the sign for the deficit... I was actually calculating based on the surplus. Which, if you think about it, effectively makes it a negative deficit.

Look, I’ve already demonstrated that it’s entirely possible to maintain a surplus while still operating with a profit. 😁

I don't really have anything specific to say about this. It’s just one of those things that sits there. I was thinking about it earlier while I was grabbing coffee near Starbucks, just watching the traffic move along, and it occurred to me how much people focus on the wrong details sometimes. Not that anyone is wrong, necessarily. Just a thought. Anyway, nothing more to add here. kaže:
I didn't get the sign wrong on the deficit. I was actually calculating based on the surplus. It’s just a negative deficit. That's how it works.

I proved you can live on a surplus and still actually make a profit. 😁

Look, you changed the example, but honestly, you’re still making that same mistake over and over again. In a closed system, all inputs are equal regarding costs, and you're just not accounting for that properly.

Gross revenue plus tax equals 120 plus 40, which brings you to 160. Just a simple calculation. It works out that way. Simple math.
Total expenses plus what the government picks up equals 130. It’s just 100 plus 30. Simple math. Everything adds up that way.

You’ve still got 30 bucks sitting there that haven't been settled.😕

Take a look at this GIF. It’s all pretty straightforward. Really simple stuff. Everything is easy to follow.🙂

Douglas Reed3 said:I asked a simple question. It couldn't have been any more straightforward than that. I wasn't interested in worker productivity, skill levels, or capital investment. My only question was whether both families actually benefited from the trade they conducted. If there were no profit in it, they certainly wouldn't have made the exchange. One family wouldn't trade if it meant taking a loss. As far as I'm concerned, buying a bushel of apples for... $1.75 I’m passing on them; I wouldn't buy them if I were anyone else. If I eventually decide to pick up a pound of apples, then that pound of apples will be worth more to me than... $1.75 Just like the merchant says... $1.75 It is worth more than his bushel of apples... we both stand to gain from this exchange...

Do you really expect people on this forum to download thousands of pages of study material and hundreds of hours of lectures into your head instantly? Not only that, but after everyone has kindly explained that trading—outside of rare cases like options, futures, or gambling—is essentially a zero-sum game where one person loses just so another can win... you still insist on ignoring everything. You trip up on the very first lesson of supply and demand from an intro economics textbook, yet you claim you're ready to tackle macroeconomics and the Federal Reserve...

The Federal Reserve handles primary money issuance through open market operations involving securities. Secondary issuance occurs via banks using the money multiplier. Imagine the Federal Reserve injects $333 and sets the reserve requirement at 20%. That cash ends up in a JP Morgan Chase account where you deposit $333. JP Morgan Chase takes your $333, $67 and holds them as required reserves, then issues $267 in credit to someone else. In this way, we turn our initial $333 into 1,800... and as banks continue this cycle, we eventually reach $1667 in total money supply.

One must know how to apply mathematics within economics. When you write an identity—an equation—it must actually make sense. If you make an assumption, it must be logical. You cannot simply write banana + egg = car and try to prove that a banana equals a car minus an egg.

So. Somied is still trying to use errors to relativize my mathematical proof. Look, I make mistakes too, but I spent the entire day studying this specific proof and determined it is correct. Maybe my presentation was a bit clumsy, which left some room for people to question the results. That’s why I added a short, 100% accurate derivation in my last post. It’s based on two equations that are objectively true. By adding and subtracting those equations, you get a result that allows you to look at variable influences and draw conclusions about primary issuance and its link to profit. From there, you logically conclude that the federal budget deficit shouldn't be financed through credit because it leads straight to ruin.🙂

Actually, your very first premise, "banana + egg = car," is false, so you can't base anything else on it. In my case, all the initial claims in the mathematical model are true. I simply performed the permitted operations and reduced the unknowns. Check out that GIF I posted earlier. In this mathematical model, I don't involve secondary issuance because you have to build the foundation on solid ground before you upgrade it. Besides, I'm not interested in messing around with monetary policy right now. In this situation, playing around with credit won't save us if we don't realize we are missing 14 years of primary issuance.🙏

So, you think we should just print more love and suddenly everyone's making a profit and living happily ever after?...