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Universal Basic Income Is Inevitable, Unavoidable, and Incoming”

The last time I saw universal basic income discussed on television, it was laughed away by a Conservative MP as an absurd idea. The government giving away wads of cash responsibility-free to the entire population sounds entirely fantastical in this austerity-bound age, where “we just don’t have the money” is repeated endlessly as a mantra. […]

In this world, universal basic income seems like a rather distant prospect. Yes, there are some proposals, like Switzerland and Finland, both of which are holding a referendum on universal basic income. But I expect neither of them to pass. The current political climate is just too patriarchal. We live in a world where free choice is unfashionable. The mass media demonizes the poor as feckless and too lazy and ignorant to make good choices about how to spend their income. Better that the government spend huge chunks of GDP employing bureaucrats to administer tests, to moralize on the virtues of work, and sanction the profligate.

But this world is fast changing, and the more I study the basic facts of economic life in the early 21st century, the more inevitable universal basic income begins to seem.

And no, it’s not because of the robots that are coming to take our jobs, as Erik Brynjolfsson suggests in his excellent The Second Machine Age. While automation is a major economic disruptor that will transform our economy, assuming that robots will dissolve jobs entirely is just buying into the same Lump of Labour fallacy that the Luddites fell for. Automation frees humans from drudgery and opens up the economy to new opportunities. Where once vast swathes of the population toiled in the fields as subsistence farmers, mechanization allowed these people to become industrial workers, and their descendants to become information and creative workers. As today’s industries are decimated, and as the market price of media falls closer and closer toward zero, new avenues will be opened up. New industries will be born in a neverending cycle of creative destruction. Yes, perhaps universal basic income will help ease the current transition that we are going through, but the transition is not the reason why universal basic income is inevitable.

So why is it inevitable? Take a look at Japan, and now the eurozone: economies where consumer price deflation has become an ongoing and entrenched reality. This occurrence has been married to economic stagnation and continued dips into recession. In Japan — which has been in the trap for over two decades — debt levels in the economy have remained high. The debt isn’t being inflated away as it would under a more “normal” rate of growth and inflation. And even in the countries that have avoided outright deflationary spirals, like the UK and the United States, inflation has been very low.

The most major reason, I am coming to believe, is rising efficiency and the growing superabundance of stuff. Cars are becoming more fuel efficient. Homes are becoming more fuel efficient. Vast quantities of solar energy and fracked oil are coming online. China’s growing economy continues to pump out vast quantities of consumer goods. And it’s not just this: people are better educated than ever before, and equipped with incredibly powerful productivity resources like laptops, iPads and smartphones. Information and media has fallen to an essentially free price. If price inflation is a function of the growth of the money supply against growth in the total amount of goods and services produced, then it is very clear why deflation and lowflation have become a problem in the developed world, even with central banks struggling to push out money to reinflate the credit bubble that burst in 2008.


Much, much more is coming down the pipeline. At the core of this As the cost of superabundant and super-accessible solar continues to fall, and as battery efficiencies continue to increase the price of energy for heating, lighting, cooking and transportation (e.g. self-driving electric cars, delivery trucks, and ultimately planes) is being slowly but powerfully pushed toward zero. Heck, if the cost of renewables continue to fall, and advances in AI and automation continue, in thirty or forty years most housework and yardwork will be renewables-powered, and done by robot. Water crises can be alleviated by solar-powered desalination, and resource pressures by solar-powered robot miners.

And just as computers and the internet have made huge quantities of media (such as this blog) free for users, 3-D printers and disassemblers will push the production of stuff much closer to free. People will simply be able to download blueprints from the internet, put their trash into a disassembler and print out new items. Obviously, this won’t work anytime soon for complex objects like smartphones, but every technology company in the world is hustling and grinding for more efficiency in their manufacturing processes. Not to mention that as more and more stuff is manufactured, and as we become more environmentally conscious and efficient at recycling, this huge global stockpile of stuff acts as another deflationary pressure.

These deflationary pressures will gradually seep into services as more and more processes become automated and powered by efficiency increasing machines, drones and robots. This will gradually come to encompass the old inflationary bugbears of medical care, educational costs and construction and maintenance costs. Of course, I don’t expect this dislocation to result in permanent incurable unemployment. People will find stuff to do, and new fields will open up, many of which we are yet to imagine. But the price trend is clear to me: lots and lots of lowflation and deflation. This, ultimately, is at the heart of capitalism. The race for efficiency. The race to do more with less (including less productivity). The race for the lowest costs.

I’ve written about this before. I jokingly called it “hyperdeflation.”

And the obvious outcome, at the very least, is global Japan. This, of course, is not a complete disaster. Japan remains a relatively rich and stable country, even after twenty years of deflation. But Japan’s high level of debt — and particularly government debt — does pose a major concern.  Yes, as a sovereign currency issuer borrowing in its own currency the Japanese government runs no risk of actual default. But slow growth and deflation are stagnationary. And without growth and inflation, the government will have to raise taxes to cover the deficit, spiking the punchbowl and continuing the cycle of debt deflation. And of course, all of the Bank of Japan’s attempts at reigniting inflation and inflating away that debt through complicated monetary operations in financial markets have up until now proven pretty ineffectual.

This is where some form of universal basic income comes in: ultimately, the most direct stimulus for lifting inflation and triggering productive economic activity is putting cash in the people’s hands. What I am suggesting is that printing money and giving it away to people — as opposed to trying to push it out through the complicated and convoluted transmission mechanism of financial sector lending — will ultimately become governments’ major backstop against debt deflation, as well as the temporary joblessness and economic inequality created by technological acceleration. Everything else, thus far, has been pushing on a string. And the deflationary pressure is only going to become stronger as efficiency rises and rises.

Throw enough newly-created money into the economy, inject inflation, and nominal tax revenues can rise to cover the debt load. Similarly, if inflation gets too high, cut back on the money-creation or take money out of circulation and bring inflation into check, just as central banks have done for the last century.

The biggest obstacle to this, in my view, is the interests of those with lots of money, who like deflation because it increases their purchasing power. But in the end, rich people aren’t just sitting on hoards of cash. Most of them do have businesses that would benefit from their clients having higher incomes so as to increase spending, and thus their incomes. Indeed, in a debt-deflationary spiral with default cascades, many of these rentiers would face the same ruin as their clients, as their clients default on their obligations.

And yes, I know that there are legal obstacles to fully-blown helicopter money, chiefly the notion of central bank independence. But I am an advocate of central bank independence, for a variety of reasons. Indeed, I don’t think that universal basic income should be a function of fiscal spending at all, not least because I think that dispassionate and economically literate central bankers tend to be better managers of monetary expansion and contraction than politically motivated — and generally less economically literate — politicians. So everything I am describing can and should be envisioned as a function of monetary policy. Indeed, what I am advocating for is a new set of core monetary policy tools for the 21st century.

via Universal Basic Income Is Inevitable, Unavoidable, and Incoming — azizonomics



Along with thanks and compliments to the sources for the shared data

Creative Commons Copyright © Arrested Developments 2015



Trump has planned that immediately after the inauguration, which is a Friday, he’ll be taking the rest of the day off.

President Donald Trump speaks at inauguration ceremonies swearing him in as the 45th president of the United States on the West front of the U.S. Capitol in Washington

“One of the first orders I’m gonna sign — day one — which I will consider to be Monday as opposed to Friday or Saturday,” Donald Trump has informed British newspaper The Times. “I mean my day one is gonna be Monday because I don’t want to be signing and get it mixed up with lots of celebration.” That’s right, Trump is admitting, to the foreign press no less, that he’s afraid to sign any legislation on his first (or second or third) day in office because he’s afraid he might get it “mixed up.”

As We know it’s complicated business, so shortly after he was sworn in as President of the United States, Donald Trump rounded up lawmakers and members of his family in a room near the Senate floor to watch him take his first presidential actions—signing some paperwork.

Trump put his signature on a few presidential documents, including a proclamation for a National Day of Patriotism and formal nominations for his Cabinet picks, just after he was officially inaugurated, his spokesman Sean Spicer said. Details about the National Day of Patriotism were not immediately clear.

Trump also signed a waiver allowing retired Marine Gen. James Mattis to become the new Defense Secretary, despite a law that would have required him to be out of active military duty for seven years. Mattis was later confirmed and sworn in by Vice President Mike Pence on Friday.

At the same post-inauguration ceremony, Trump also suspended a housing order that had benefitted people buying new homes. It will increase the amount of money that most non-wealthy mortgage holders must pay to the Federal Housing Authority’s insurance program.

He then doled out the signing pens to members of Congress.

About the same time, Trump fired off a series of tweets from his personal account, reiterating what he said during his first speech: that Americans have taken back power from the government. He said the day would be “remembered as the day the people became the rulers of this nation again,” as he pledged to “bring back” America to its glory.

The Trump administration also updated the official White House website, writing that Trump is “committed to eliminating harmful and unnecessary policies” of former President Barack Obama, including his Climate Action Plan and other environmental initiatives.

In his first executive order—signed in the Oval Office—Trump directed government agencies to scale back Affordable Care Act regulations, allowing agencies to delay or waive provisions of the law, thereby beginning to roll back it back before an official repeal by Congress, the New York Times reported.

Trump’s administration also ordered a freeze on all pending government regulations in order to review and approve them—a move that former Obama also took after he was inaugurated.

During the afternoon, Trump attended a luncheon hosted by Congress in the Capitol before heading to participate in the presidential procession and inaugural parade on Pennsylvania Avenue. Later in the evening, he attended three official inaugural balls.

Enter a caption

U.S. President Donald Trump and first lady Melania Trump walk along Pennsylvania Avenue during the inaugural parade from the U.S. Capitol in Washington, U.S., January 20, 2017.

After repeating the 35-word oath of office in the ceremony, Trump stretched his arms wide and hugged his wife, Melania, and other members of his family. Ceremonial cannon blasts fired.

The Trumps rode in a heavily armored limousine to lead an inaugural parade to the White House. The couple and their 10-year-old-son, Barron, hopped out of the limo and walked part of the parade route, waving to cheering well wishers.

Later, they watched some of the parade from a reviewing stand built on Pennsylvania Avenue in front of the White House.



Trump’s election was greeted with concern by many countries around the world, in part because of the potential for an isolationist foreign policy.

In an interview after Trump was sworn in, German Vice Chancellor Sigmar Gabriel said, “What we heard today were high nationalistic tones.”

“I think we have to prepare for a rough ride,” Gabriel told public broadcaster ZDF, adding that Europe should stand together to defend its interests.

Mexican President Enrique Pena Nieto congratulated Trump on his inauguration, but cautioned that the sovereignty, national interest and protection of Mexicans would be paramount.

Mexicans have been angered by Trump’s pledge to build a wall along the southern U.S. border to keep out illegal immigrants, and to make Mexico pay for it. Trump has also frequently criticized U.S. companies that have manufacturing operations in Mexico.

U.S. stocks closed higher on Friday in a modest advance, marking the first time in more than 50 years that a new commander-in-chief has been welcomed by a rising equity market on his first day in office.

U.S. President Trump and Vice President Pence stand for the singing of the U.S. National anthem during their inauguration ceremony at the U.S. Capitol in Washington

Pope Francis urged Trump to be guided by ethical values, saying he must take care of the poor and the outcast.

In Moscow, Russians hoping Trump will usher in a new era of detente celebrated his inauguration. Russian nationalists held an all-night party at what used to be the main Soviet-era post office in Moscow. In the city of Zlatoust, craftsmen released a limited series of silver and gold commemorative coins, engraved with “In Trump We Trust.”


Trump signaled the possibility of a more aggressive approach to Islamic State militants.

“We will reinforce old alliances and form new ones, and unite the civilized world against radical Islamic terrorism, which we will eradicate completely from the face of the earth,” he said.

In between Palestinian President Mahmoud Abbas, in a statement posted in his name on the official Palestinian news agency WAFA, congratulated Trump. He added, “I look forward to working with him for the sake of peace, security and stability in a world that is troubled and in a region that lives a tragic era, and to contribute to creating a safe future for everyone.”

The U.S. Senate overwhelmingly voted on Friday to confirm retired General James Mattis as defense secretary and retired General John Kelly as homeland security secretary, making them the first Trump Cabinet nominees to be approved. New Vice President Mike Pence swore both in Friday night.


Trump’s to-do list has given Republicans hope that, since they also control the U.S. Congress, they can approve sweeping tax reform and roll back many federal regulations they say are stifling the U.S. economy, as well as repeal and replace Obamacare.

“He’s going to inject a shock to the system here almost immediately,” Trump senior adviser Kellyanne Conway told Fox News.

Democrats, in search of firm political footing after the unexpected defeat of Clinton, are planning to fight him at every turn.

Trump’s critics have been emboldened to attack his legitimacy because his win came only in the Electoral College, which gives smaller states more clout in the outcome. He lost the popular vote to Clinton by about 2.9 million.

Trump’s critics also point to the conclusion of U.S. intelligence agencies that Russia used hacking and other methods during the campaign to try to tilt the election in the Republican’s favor. Trump has acknowledged the finding – denied by Moscow – that Russia was behind the hacking but said it did not affect the outcome of the election.


Stocks were essentially flat Friday afternoon as President Donald Trump took the presidential oath, with the S&P 500 up five points, or 0.2%.

It’s not as if Trump’s presidency is sudden news, of course. Investors have had more than two months to predict what the new regime would mean for the stock market, and they’ve been generally optimistic. The S&P is up 6% since the election.

Investors think Trump’s administration will loosen federal regulations and lower the corporate tax rate, which could benefit companies across various industries.

Trump takes office with work to do to improve his image.

An ABC News/Washington Post poll this week found only 40 percent of Americans viewed him favorably, the lowest rating for an incoming president since Democrat Jimmy Carter in 1977, and the same percentage approved of how he has handled the transition.

Trump’s rise, while welcomed by Republicans tired of Obama’s eight years in office, raises a host of questions for the United States.

Trump campaigned on a pledge to take the country on a more isolationist, protectionist path and he has vowed to impose a 35 percent tariff on imports from U.S. companies that went abroad.

More than 60 Democratic lawmakers stayed away from the proceedings to protest Trump.

Many demonstrators participated in a “Women’s March on Washington” on Saturday. Protests are also planned in other cities in the United States and abroad.


As president of the United States, Trump should also realize he has become the leader of the free world – that’s why people all over the globe are watching his inauguration speech. And that’s why everyone hoped that he would also address the need for determined American global leadership.”




Along with thanks and compliments to the sources for the shared data

Creative Commons Copyright © Arrested Developments 2015

Donald Trump’s Inaugural address

Donald Trump’s Inaugural address


Donald Trump has been sworn in as the 45th president of the United States.

To a crowd of hundreds of thousands Trump gave his first inaugural address to the American people after taking the oath of office.


Presidents have been inaugurated on January 20, since Franklin D. Roosevelt took the oath of office in 1937, moving up from the previous day of March 4.

The swearing-in is just one of the day’s activities.

Traditionally, presidents have started the day with a morning worship service and Trump was handed the nuclear codes and briefed on firing missiles ahead of the ceremony.

The security convoy escorting the Trumps to church was enormous.

Trump was sworn in using two Bibles – his own, and the one used by Abraham Lincoln at his first inauguration in 1861, and the oath will be administered by Chief Justice John Roberts.

The Lincoln Bible is bound in burgundy velvet, and was also used for Barack Obama’s inaugurations in 2009 and 2013.

In front of a crowd of around 900,000 Americans, Trump took to the stage and vowed to unite a divided country in his inaugural address.


Below is a rush transcript of Trump’s speech in full:

Chief Justice Roberts, President Carter, President Clinton, President Bush, President Obama, fellow Americans, and people of the world, thank you”.


We, the citizens of America, are now joined in a great national effort to rebuild our country and restore its promise for all of our people. Together, we will determine the course of America and the world for many, many years to come.

We will face challenges. We will confront hardships, but we will get the job done. Every four years, we gather on these steps to carry out the orderly and peaceful transfer of power. And we are grateful to President Obama and first lady Michelle Obama for their gracious aid throughout this transition. They have been magnificent. Thank you.

Today’s ceremony however, has very special meaning, because today we are not merely transferring power from one administration to another or from one party to another, but we are transferring power from Washington, DC, and giving it back to you, the people.


For too long, a small group in our nation’s Capital have reaped the rewards of government while people have borne the cost. Washington flourished, but the people did not share in its wealth.

Politicians prospered, but the jobs left and the factories closed. The establishment protected itself, but not the citizens of our country. Their victories have not been your victories. Their triumphs have not been your triumphs, and while they celebrated in our nation’s capital, there was little to celebrate for struggling families all across our land.

That all changes starting right here and right now, because this moment is your moment. It belongs to you. It belongs to everyone gathered here today and everyone watching all across America. This is your day. This is your celebration. And this, the United States of America, is your country.

Because what truly matters is not what truly controls our government but whether our government is controlled by the people. January 20, 2017, will be remembered as the day the people became the rulers of this nation again.

The forgotten men and women of our country will be forgotten no longer. Everyone is listening to you now. You came by the tens of millions to become part of a historic movement, the likes of which the world has never seen before.

At the center of this movement is a crucial conviction, that a nation exists to serve its citizens. Americans want great schools for their children, safe neighborhoods for their families, and good jobs for themselves. These are just and reasonable demands of righteous people and a righteous public. But for too many of our citizens, a different reality exists.

Mothers and children trapped in poverty in our inner cities, rusted-out factories, scattered like tombstones across the landscape of our nation, an education system flush with cash but which leaves our young and beautiful students deprived of all knowledge.

And the crime and the gangs and the drugs that have stolen too many lives and robbed our country of so much unrealized potential. This American carnage stops right here and stops right now.

We are one nation, and their pain is our pain. Their dreams are our dreams, and their success will be our success. We share one heart, one home, and one glorious destiny.

The oath of office I take today is an oath of allegiance to all Americans.

For many decades, we have enriched foreign industry at the expense of American industry, subsidized the armies of other countries while allowing for the very sad depletion of our military.

We have defended other nations’ borders while refusing to defend our own, and spent trillions and trillions of dollars overseas while America’s infrastructure has fallen into disrepair and decay.

We’ve made other countries rich while the wealth, strength, and confidence of our country has dissipated over the horizon. One by one, the factories shuttered and left our shores with not even a thought about the millions and millions of American workers that were left behind. The wealth of our middle class has been ripped from their homes and then redistributed all across the world.

But that is the past, and now we are looking only to the future. We assembled here today are issuing a new decree to be heard in every city, in every foreign capital, and in every hall of power. From this day forward, a new vision will govern our land. From this day forward, it’s going to be only America first, America first.

Every decision on trade, on taxes, on immigration, on foreign affairs will be made to benefit American workers and American families. We must protect our borders from the ravages of other countries making our products, stealing our companies, and destroying our jobs.

Protection will lead to great prosperity and strength. I will fight for you with every breath in my body. And I will never, ever let you down.

America will start winning again, winning like never before. We will bring back our jobs. We will bring back our borders. We will bring back our wealth. And we will bring back our dreams. We will build new roads and highways and bridges and airports and tunnels and railways all across our wonderful nation. We will get our people off of welfare and back to work,rebuilding our country with American hands and American labor.

We will follow two simple rules: Buy American and hire American.

We will seek friendship and goodwill with the nations of the world, but we do so with the understanding that it is the right of all nations to put their own interests first. We do not seek to impose our way of life on anyone, but rather to let it shine as an example. We will shine for everyone to follow. We will reinforce old alliances and form new ones and reform the world against radical Islamic terrorism, which we will eradicate from the face of the Earth.

At the bedrock of our politics will be a total allegiance to the United States of America and through our loyalty to our country, we will rediscover our loyalty to each other. When you open your heart to patriotism, there is no room for prejudice. The Bible tells us how good and pleasant it is when God’s people live together in unity. We must speak our minds openly, debate our disagreements honestly, but always pursue solidarity.

When America is united, America is totally unstoppable.

There should be no fear. We are protected, and we will always be protected. We will be protected by the great men and women of our military and law enforcement. And most importantly, we will be protected by God.

Finally, we must think big and dream even bigger. In America, we understand that a nation is only living as long it is striving. We will no longer accept politicians who are all talk and no action, constantly complaining but never doing anything about it. The time for empty talk is over.

Now arrives the hour of action. Do not allow anyone to tell you that it cannot be done. No challenge can match the heart and fight and spirit of America. We will not fail. Our country will thrive and prosper again. We stand at the birth of a new millennium, ready to unlock the mysteries of space, to free the Earth from the miseries of disease and harness the energies, industries, and technologies of tomorrow.

A new national pride will stir ourselves, lift our sights, and heal our divisions. It’s time to remember that old wisdom our soldiers will never forget, that whether we are black or brown or white, we all bleed the same red blood of patriots. We all enjoy the same glorious freedoms. And we all salute the same great American flag.

And whether a child is born in the urban sprawl of Detroit or the windswept plains of Nebraska, they look at the same night sky. They fill their heart with the same dreams, and they are infused with the breath of life by the same almighty creator.

So to all Americans, in every city near and far, small and large, from mountain to mountain, from ocean to ocean, hear these words: You will never be ignored again.

Your voice, your hopes, and your dreams will define our American destiny. And your courage, goodness, and love will forever guide us along the way.

Together, we will make America strong again. We will make America wealthy again. We will make America proud again. We will make America safe again.

And yes, together, we will make America great again.

Thank you. God bless you. And God bless America”.

Melania and Donald Trump on the way to church on inauguration day

Trump’s election was greeted with concern by many countries around the world, in part because of the potential for an isolationist foreign policy. Now he has been sworn in, when does Trump get the chance to start work on the controversial policies which have divided a nation?



Along with thanks and compliments to the sources for the shared data

Creative Commons Copyright © Arrested Developments 2015


Cashless Monetary System means Absolute Power over you

Why the Governments Will Implement the Cashless Monetary System

Of all who are working to bring your nation into a cashless monetary system, the desire to do this is greatest in the hearts of those who would rule over us and the world.

Governments, Bankers, Elites and Capitalists will become more Richer and more powerful but the average citizens will bear the burnts.

Absolute Power

Those who dream of absolute power over the masses realize that in order to achieve their goal, it is necessary to have absolute control of the world’s economic system. Tyrants know that if they can effectively separate every individual from his or her wealth, requiring the approval of the system for every financial transaction, that they can control the world. They have been, and are, continually working to develop and implement this system.

While banks, businesses, and others will gain financially from an electronic cashless monetary system, government will exponentially increase its power over the people.


 The people who wield power within government are those who are most able to effect this fundamental change in the way the world does business. This is because it will be those in government who will determine, by law, the type of system that will be used to control buying and selling and the form of currency that will be used.

Let us consider a few of the reasons why those who desire power over others want to implement a system of trade that they can control completely.

“Government” Money

Since government does not produce wealth, it must take the money it needs to operate by taxing those who produce wealth; that is, those who work.

The innumerable layers of taxes that have been heaped on the worker have caused him to render unto Caesar much of his hard earned wealth. Not only is the worker’s income taxed by the government, but in most cases he must pay taxes on his income to the state and sometimes even to the local government.

Property taxes must be paid regularly if he wants to keep his property. Other taxes are imbedded in the cost of the goods and services and are paid by the consumer when an item is purchased. Then there are sales taxes that must be paid to state or local governments when an item is purchased. All taxes are paid to the government, and while few people know it, all taxes come out of the pockets of those who produce wealth — again the workers.

While we like to think of ourselves as “the land of the free”, the truth is that there is almost nothing we can do that isn’t either taxed, or regulated in some way by some level of government.

The Income Tax and Power

The income tax system as it now exists is one of the most burdensome, corrupt, confusing, and oppressive methods of taxation ever devised by man. One reason for this is that the system is used not only for the collection of money to operate the government, but it is also a mechanism by which those who are in power may increase their power. It is so complex that it is understood by no one. It is easily manipulated by those who write the laws and has been used by politicians to reward friends and punish enemies.

Over the years, it has metastasized so that its tentacles now reach into every part of our lives, and the farther it reaches the more it controls.

From time to time many have suggested, and some have worked very hard, to replace this monstrosity with tax systems that would be simpler and less intrusive. All of these attempts have failed. The reason every attempt to replace the graduated income tax with some other form of taxation has failed can be summed up with one word: power. The graduated income tax gives those who control it the power to control every segment of the economy and thereby the ability to control every part of our society and even the behavior of individuals.


They say it would enable our economy to grow by leaps and bounds and would increase our liberty and privacy, but it would actually increase the power of those who use the present system of taxation to oppress and control the people.

Under our present system of taxation, every part of a person’s life is open to the government. The requirements of reporting income and expenditures for tax purposes creates a record of a company’s or an individual’s life. The government requires that any and all information that is demanded by the tax collecting agencies be supplied to them. This information gives the government the ability to examine not only a person’s financial dealings but their personal and political lives as well.

With the present system, there are various tax rates, deductions, exemptions, and tax credits, enabling those who write the tax laws to exert forces upon the economy, society in general, organizations, and even the individual. Sometimes this is done in order to force industry and individuals to make decisions based upon tax considerations rather than what would otherwise be best for the business or the individual.

The power to reward friends and punish enemies is perhaps the most misused power derived from this complicated and easily manipulated system. Many favors can be bestowed upon those who support the right party, politician, or program. Much misery and even financial ruin can be visited upon those who don’t.

The Collection of Taxes

In order to make certain that people don’t spend their earnings before they meet their tax obligations, employers are required to withhold a portion of each employee’s earnings. The money that is withheld from the employee’s earnings is sent by the employer to the government’s tax–collecting agencies. This enables the tax–collecting agencies to claim their share of a person’s earnings before the person gets possession of their earnings.

Problems Collecting Taxes

When it comes to the payment of taxes, companies and persons who are self employed operate under a different set of rules. The rules under which a company, or someone who is self employed are based somewhat on the honor system. This system requires them to pay taxes based on their estimated income.

 This gives them access to their money before the tax–collecting agencies of the government. This arrangement means that the government must rely on the honest reporting of income by companies and those who are self-employed. It is also gives the dishonest taxpayer opportunity to conceal income. This is especially so when the business is conducted on a cash basis.

Ever since there have been taxes, there have been those who evade the payment of taxes. Government has had to implement enforcement measures to ensure that it collects the amount of money it demands of the people. Those who are charged with collecting taxes are always seeking better and more efficient ways to collect the revenue they believe should be paid to the government.

If the government becomes lax in the collection of taxes, then few, if any, people would pay taxes. The age old problem for governments when it comes to tax collection is that with cash or some other medium of exchange that allows individuals to deal directly with others, transactions are easily concealed from the government. Many people attempt to conceal profits from the tax–collecting agencies of the government by simply failing to report income. Also, by its very nature, income derived from illegal activities is not reported, unless it is reported as having come from some other activity that is legal. The fact that there is a great amount of economic activity concealed from the government creates problems in the area of tax collection.

To minimize tax fraud, the tax collecting agencies must develop accounting procedures and investigative methods that will ensure all income is reported. This is a very complicated and costly undertaking, since it requires the creation a huge bureaucracy which must try to monitor all economic activity. If tax–collecting agencies had a way of knowing about every transfer of money or goods from one entity to another, tax fraud would be eliminated. This would result in a huge windfall of money for the government as a result of increased collections. Tax evasion, though, can never be entirely eliminated as long as our present economic system is in place, because financial transactions can still be conducted privately by the use of cash, or the transfer of other items of value.

No Place to Hide Wealth

Once the cashless monetary system is in place, hidden cash transactions will no longer be possible because cash will no longer exist.

All financial activity will take place within the computers of the new electronic economic system. Every financial transaction, no matter how small, whether it involves funds credited to, or debited from a person’s account, will be known by the government. All income and expenditures will be carefully monitored and examined by the government’s computers. The tax–collecting agencies will know all there is to know about every company’s or individual’s financial dealings. They will know the sources of all income. They will also know when, how, and where all money is spent. This will ensure that taxes are paid on all income.

Such a system will enable governments to subject everyone to a continual financial strip search.

Instant Tax Collection

Since all currency will consist of electronic credits that cannot be removed from the system, the tax–collecting agencies will no longer have to depend on voluntary reporting of income by companies or those who are self-employed.

 The government will not have to rely on the honesty of those who are reporting income. Tax–collecting agencies, by the use of computers, will be able to immediately calculate for themselves the amount of tax owed by companies and the self-employed.


This will be done by comparing revenues to expenditures. Once the amount of tax owed is determined, the amount will be automatically debited from the financial account of the person or business. This will enable the government to claim the taxes that it determines are owed on a more frequent basis than the present system. Tax payments will be transferred from the taxpayer’s account to the government as frequently as the tax–collecting agencies desire. This means that the government will be able to confiscate money on a daily basis, if this is the desire of those who collect taxes. This will prevent a company or an individual from coming up short when taxes are due. These features of the cashless system will eliminate the problem of delinquent tax payments. It will also eliminate tax evasion.

Maintaining the Money Supply

Manufacturing paper currency and coins is a very expensive task. Physical currency must be designed and manufactured in such a way as to make counterfeiting as difficult as possible. It must also be manufactured in sufficient quantities to supply the demand of the economy. Since physical money wears out with usage, recalling and replacing worn currency is a continual process. Distribution of money once it is created is expensive in that it must be transported, and security must be provided as it is moved from the treasury to the banks.

Since much of our economy’s business is already transacted electronically, only a portion of the money that is presently in circulation actually exists as paper currency and coinage. Those who control the monetary system know that elimination of all paper money and coins is necessary in order to obtain the power they desire.

This transition is already well underway.

First of all, the creation of electronic credits is much easier and faster than creating physical money. Creating electronic credits and adding them to the money supply is a very simple task that could be accomplished with a few keystrokes on a computer’s keyboard or by a program that will make automatic adjustments to the money supply. It does not involve the purchase of expensive paper, inks, or metal as does the creation of physical money. It does not require complicated and expensive printing presses or dies. It also eliminates the lag between the decision to adjust the money supply and the actual adjustment.

Electronic currency is not subject to wear and tear so it never needs to be replaced. While physical money must be transported from place to place, electronic currency is moved instantaneously to any place on earth through communication networks. By eliminating paper currency and coins and replacing them with electronic currency, the huge expense of creating and maintaining the physical money supply will be eliminated.

Controlling the Economy through Wage and Price Controls

Since all commerce will be conducted within the closed electronic monetary system, wages, the prices of all goods and services, as well as the profit margins of companies could be set at particular levels or within certain ranges, there are many who subscribe to the notion that the pressures of supply and demand can be regulated in this way. With a closed monetary system, controlling wages and prices will be very easy, and the temptation to use this power to attempt to control inflation and other economic pressures will be too great to resist.


Since all transfers of funds must be approved by the system, any wage, price, or profit margin that is deemed too high will result in the transaction either being refused or automatically adjusted to be within the allowed limits. This will be the end of free enterprise and will eventually reduce the availability of goods and services.

Cashless Monetary System + RFID = Absolute Control

The main objective of tyrants is to have the ability to force the populous to comply with every command. This goal will be attained when absolute control of all buying and selling is achieved by the convergence of the closed cashless monetary system and the RFID system of inventory control.

This will be done by interfacing these two systems so they will perform as one system.

To accomplish this goal requires that the transition to a cashless monetary system be completed, and for all items produced or offered for sale to be identified with RFID chips. This will mean that in order for an item to be sold or for ownership of an item to be transferred from one person to another, it must contain a chip and the item must be registered with a database that is controlled by the government. This will be done to eliminate any possibility of a black market that might circumvent the closed monetary system of trade.


Once this system becomes operational, buying and selling apart from the closed monetary system will become impossible.

Bartering will also be impossible, since ownership of items will be recorded within the system. Money laundering will also become extremely difficult, if not impossible The reason for this will be that since the government will have an inventory of all items produced and all items possessed by individuals, they cannot be sold unless they are deleted from the inventory of one person’s possessions and added to another person‘s inventory.

If an item does not have an RFID chip registering it with the inventory system, it cannot be sold. This will be because when credits are to be transferred from one person’s financial account to another person’s financial account, there must be a corresponding transfer of goods which takes place at the time of sale. Even items offered for private sale must first be tagged with an RFID chip and then registered with the government‘s inventory system before there will be an authorization of payment to the seller. Unless these steps are performed, the item cannot be sold.

With the closed cashless system in place, those who control the system can implement any law or program they desire. It will be a simple matter to use the closed monetary system as the engine of social and political change, and as the weapon for enforcement.

If a particular activity is deemed to be good by the powers that be, then it will be permitted, or even encouraged.


 This will be done by allowing the approved activity through the use funds stored within the system. If an activity is determined to be in inappropriate, for example certain religious or political activities, then the funds that are needed by the individual or group to engage in these activities will be denied.

 All expenditures, and therefore every activity, will not only be monitored, but must also meet the approval of the authorities who will control the closed cashless monetary system.

Once the closed monetary and RFID systems are completed and interfaced one with the other, those who would rule the world will have absolute economic power over us, and with this power they will force compliance with their edicts. The cashless/RFID system will enable the ruling power to do this without a large military or police force.

more to come…


Along with thanks and compliments to the sources for the shared data

Creative Commons Copyright © Arrested Developments 2015

Indian Government has No Clues of Black Money in India

Indian Government has No Estimation ever of Black Money in India


There is no official estimation of black money either before or after November 8 — the day government announced scrapping of old Rs 500 and Rs 1,000 notes, Indian Finance Minister Arun Jaitley said in Parliament on Dec 16.

“There is no official estimation of the amount of black money either before or after the government’s decision of November 8, 2016 declaring that bank notes of denominations of the existing series of the value of Rs 500 and Rs 1000 shall cease to be legal tender with effect from November 9,” he said in a written reply in Lok Sabha.

And You are very much aware that the Indian Government is not even sure how much counterfeit currency was rolling in India before Demonetization and how much rolling now.. All they have stated that the govt had been informed of a mint in Peshawar where only fake Indian currency notes are printed every year by which Pak pushes Rs 70 crore worth of fake currency every year into the Indian economy.

And according to RBI, there is only Rs 400 crore worth of counterfeit currency in India.

Then Why Demonetization?

According to the Indian prime minister, there are two objectives. One is (curbing) terrorist financing and counterfeit currency—and the second is that the black economy has become very large and it is the source of poverty and all the problems in India so we need to get rid of the black economy.

The question isdoes demonetization overcome these two problems. As far as counterfeit notes are concerned, they are only 400 per million, which is very tiny. And according to RBI, there is only Rs 400 crore worth of counterfeit currency.

Total currency in circulation is Rs 17.5 lakh crore. Its not even oont ke muh me zeera, as they say in Hindi. Its negligible.

Terrorists need financing. So they print these fake notes and circulate it. But once they have given the money to another person, it’s circulating within the economy. So they have to print more and more money. That is what you have to stop.

And how do you stop that?

Not by demonetization, because there are state actors involved in counterfeiting. They can counterfeit the new currency notes also.

Then & Again Why all this Drama and Ho-Hoopla of Demonetization in India ?

The Answer has been already given by us in our post Indians towards Modern Slavery on 8th November, the day India announces Demonetization.

All this has been done for just one single objective “pave the path to Cashless Economy” just for the benefit of the Global Bankers who are now the Shadow Government in India along with some of the Super Rich and ultra powerful people.

The US has had acute trouble dealing with black money and dirty cash for over a hundred years now. Yet, not once has it declared its currency illegal since it began issuing notes in 1862. That is the strength of its financial system, on which the entire world relies.

But Indian Rulers have not only sold the Indians to the Global Bankers they also exposed the strength of its financial system as well the reliability of their own currency.


A currency note is a promise that must be kept, whatever the circumstances.  This trust has also been broken in India.

Only to bring Cashless Economy in a Camouflaged way.

No Debates, No Discussions, No Public Opinion, No Bills…. Withot looking at the Drawbacks.

Mind you.. it’s not the Government but the Shadow Government going full throttle for Cashless Economy in India.

And Don’t be fooled.. You are always at risk in Cashless Economy and you will never be the absolute owner of your own wealth..There are a lot more things you need to know about Cashless System which will really make you cashless..

more to come…

Read further:
Indians towards Modern Slavery
Demonetisation Loot And Plunder Says Manmohan Singh
The cash crunch may paralyse economic activities in India


Along with thanks and compliments to the sources for the shared data

Creative Commons Copyright © Arrested Developments 2015

Mobile vs Desktop Internet Usage

Mobile vs Desktop Internet Usage

All digital growth now coming from mobile usage

Now more and more users are accessing the web from mobile devices like smartphones and tablets than they did from desktops or notebooks.

Mobile vs Desktop Internet graphic presentation
Mobile vs Desktop Internet graphic presentation

“Mobile internet is now growing at the expense of all other media,” said Jonathan Barnard, Zenith’s head of  Zenith’s Media Consumption Forecasts. “Seventy percent of internet use is now on a mobile, and the use of a desktop for internet will fall by almost 16 percent, this year.”

However, the research paints a different picture for individual countries:

In America, for example, the development of new apps and competitive pricing options is behind the “dramatic” increase in internet use on phones, the research said.

The average American spends much longer on the internet compared to the global daily average, with each person spending two hours and 25 minutes on their phones, and 52 minutes at their desktop. By 2018, that gap is predicted to grow to people spending three hours and 20 minutes using the net on their phone, compared to just 40 minutes on the computer.

In Japan, the average time spent on phones and computers in 2016 is significantly less than in America, at 34 and 29 minutes, respectively, but the same trend is occurring, driven by young people’s use of smartphones, the research said.

Their use of messaging apps like Facebook and LINE is behind the forecast growth in mobile use, which a number of luxury and fashion brands are trying to cash in on, while a plateau of laptop and PC sales is behind the decline for computer use.

In China, the use of mobiles for internet access soared last year, with a rise of 63 percent, and the total number of mobile internet users hit 620 million people by the end of 2015.

The research pointed to the Chinese Government’s “internet plus” policy as a main factor, which encouraged more industries and companies to introduce digital tech.

In the United Kingdom this year, mobile and desktop internet is roughly equal, at one hour and 46 minutes a day, but the research suggests it’s at this point they’ll go their separate ways.

By 2018, it’s expected people will spend more than two and a half hours on their phones and an hour and 2o minutes on their computers.

The exploded adoption of smartphones due to declining Average Selling Price is resulting in an enormous surge in the number of mobile internet users in India. According to the latest report from IAMAI, titled Mobile Internet In India 2016, the country is estimated to have 400 million mobile internet users by the end of 2016.

However, it also makes clear that mobile is now the growth driver, while the desktop is rapidly becoming a secondary touch point for a large percentage of the digital audience.

Thats not to say the desktop isnt important anymore; most e-commerce transactions are still taking place on the PC, and a multi-platform strategy is critical. However, many marketers and brands still treat the desktop as the primary area of focus, which is way out of alignment with consumer behavior.



Along with thanks and compliments to the sources for the shared data

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The Rise of the Crowd-Sourced Syllabus

The Crowd-Sourced Syllabus

From the Trump Syllabus 2.0 to the Native Lives Matter Syllabus, crowd-sourced syllabi have popped up as resources for educators and readers looking for background about complex current events.

2014, following the killing of Michael Brown in Ferguson, MO, Dr. Marcia Chatelain started the #FergusonSyllabus movement to help explain the history behind the protests over police misconduct and the birth of the Black Lives Matter Movement sweeping the nation. Since then, a slew of similarly inspired syllabi have popped up as online resources for both educators and readers looking for background information about complex current events.

Some of the more well-known syllabi include, but are not limited to, the Charleston Syllabus(following the terrorist shootings at the Emanuel AME Church in Charleston, SC), the Black Lives Matter Syllabus (highlighting the history of the movement), the Native Lives Matter Syllabus (in celebration of Indigenous People’s Day), and The Standing Rock Syllabus (in response to the the continuing movement and growing protests over the Dakota Access Pipeline at Standing Rock).

But what is the purpose of all this? Jay Parkes and Mary B. Harris explored just this in a 2002 study in which they argued that the purpose of a syllabus was ultimately to drive content. Parkes and Harris also noted that a syllabus generally serves three functions, acting as a contract, permanent record, and learning tool.

Professors looking to cover specific timely topics are looking to crowd-sourced syllabi.

Professors looking to cover specific timely topics can adopt and adapt these syllabi, but the scope is much larger than simply hitting a faculty/educator audience. Any online reader becomes the student. As Parkes and Harris argue, “a well-designed syllabus can provide information that assists students to become more effective learners in areas that go beyond the scope of our own courses.” This is certainly the case with the online syllabi movement. Suzanne S. Hudd studied “collaborative classrooms,” notinghow students thrived and learned more when actively participating in the design and preparation of their class materials (as #FergusonSyllabus creator Chatelain herself testifies).

Leading up to the election, The Chronicle of Higher Education released a Trump 101 syllabus to explore his campaign academically. Following that, N.D.B. Connolly and Keisha N. Blain released a corrective one called the Trump Syllabus 2.0 that more fully considered Trump’s campaign, focusing on xenophobia, racism, and sexism. Following the release of now-President-Elect Trump’s infamous “locker room talk” footage (wherein he made references to nonconsensual, predatory sexual advances towards women), Laura Ciolowski released the Rape Culture Syllabus in order to situate the culture in which Trump’s comments about sexual assault could be normalized.

Post-election, the Trump-related syllabi and online educational resources continue to appear. Vanderbilt University’s Center for Teaching released a five-step guideline with suggestions for faculty “Teaching in Response to the Election.” The Zinn Education Project released a special lesson and resource page dedicated to “Teaching After the Election of Trump.” And Teaching Tolerance, a Project of the Southern Poverty Law Center, also offers Election 2016 Resources, including suggestions for recognizing and countering bias.

The rise of crowd-sourced syllabus is an important leap, in both disseminating and gathering knowledge and in shaping active learners, no matter what their age or location.

via The Rise of the Crowd-Sourced Syllabus — Discover



Along with thanks and compliments to the sources for the shared data

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The Speed of Light

The Speed of Light and Google Doodle

When I got to see an interesting doodle pasted on google today the 6th of Dec I was really surprised to know that a complex thing like the Speed of Light has been known to us since 340 years, hence forth I went a little deeper into it and fetch some facts & figures out of it although it is later that I’ve decided to put it before you too..

if you know all don’t mind..!

Google Doodle honouring the anniversary of the determination of the speed of light


Prior to a few hundred years ago, it was generally agreed or at least assumed that the speed of light was infinite, when in actuality its just really, really, really fast-  for reference, the speed of light is just slightly slower than the fastest thing in the known universe- a teenage girls response time if Justin Bieber were to say on Twitter, The first to reply to this tweet will be my new girlfriend.

The first known person to question the whole speed of light is infinite thing was the 5th century BC philosopher Empedocles.  Less than a century later, Aristotle would disagree with Empedocles and the argument continued for more than 2,000 years after.

One of the first prominent individuals to actually come up with a tangible experiment to test whether light had a speed was Dutch Scientist, Isaac Beeckman in 1629. Despite living in a time before lasers- which gives me the chills just thinking about- Beeckman understood that, lacking lasers, the basis of any good scientific experiment should always involve explosions of some kind; thus, his experiment involved detonating gunpowder.

Beeckman placed mirrors at various distances from the explosion and asked observers whether they could see any difference in when the flash of light reflected from each mirror reached their eyes.

It wasnt until Danish Astronomer, Ole Römer entered the fray that measurements of the speed of light got serious.

A portrait of Ole Roemer from 1700

Römer determined that, lacking lasers and explosions, an experiment should always involve outer space.  Thus, he based his observations on the movement of planets themselves, announcing his groundbreaking results on August 22, 1676.

What is the speed of light?

The speed of light is exactly 299,792,458 metres per second. James Bradley came closer to this figure in 1728 with the discovery of what is called the “aberration” of starlight and a speed of 295,000,000 metres per second for light.

But the exact number wasn’t decided upon until 1975, after decades of becoming increasingly specific, when the General Conference on Weights and Measures recommended an official figure.

The symbol for the speed of light is and is known for being a “universal physical constant”, which means that it is an exact quantifiable amount that doesn’t change.

The speed of light in a vacuum stands at “exactly 299,792,458 metres per second“.

The reason today we can put an exact figure on it is because the speed of light in a vacuum is a universal constant that has been measured with lasers; and when an experiment involves lasers, it’s hard to argue with the results.

As to why it comes out somewhat conspicuously as a whole number, this is no coincidence- the length of metre is defined using this constant: “the length of the path travelled by light in vacuum during a time interval of 1/299,792,458 of a second.”

Why is it important?

Albert Einstein’s theory of relativity, which underpins modern concepts of space and time, is built on the premise that the speed of light in a vacuum is always the same.

Video :How to measure the speed of light?

Is it possible to go faster than the speed of light?

In 2011 scientists thought they had recorded particles travelling faster than light – a finding that could have overturned one of Einstein’s fundamental laws of the universe.

Antonio Ereditato, spokesman for the international group of researchers, said that measurements taken over three years showed neutrinos pumped from CERN near Geneva to Gran Sasso in Italy had arrived 60 nanoseconds quicker than light would have done.

They were forced to admit that this was all a mistake, however, blaming a faulty wire connection.

For now at least, faster than light speed remains the stuff of science fiction.


Along with thanks and compliments to the sources for the shared data

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Demonetization Chaos

Demonetisation chaos

Out od service ATMsSupreme court of India allign itself with the Rulers and taken time to restore order
Post update of December 2 hearing on Demonetization.

Faced with “too much chaos” caused by a large number of petitions the Supreme Court has deferred the hearing of demonetisation cases to Monday. Broadly the court is being asked to judge three issues: countrywide hardships caused by the November 8 announcement, cooperative banks’ contention that allowing only state-run and private banks to exchange cash was discriminatory as they too operated according to the RBI’s guidelines and whether the government action is constitutionally valid. At an earlier hearing the Supreme Court had refused to stay the government notification. At the same time it had refused to shut the doors of justice at the critical juncture.

“Carpenters, maids, vegetable sellers are dependent on cash. Are you capable of reducing their trauma? 

Your aim is to wipe out black money but people are traumatised standing in queues for hours doing nothing,” the bench had observed. The apex court is clearly worried about the “collateral damage” that demonetisation has caused. Giving an inkling of its thinking, the bench had remarked that the Centre’s objective was not “illegal” but appeared to be “laudable”.

 Still, a senior advocate for some of the petitioners, Kapil Sibal, insists that he wants to challenge the constitutional validity of the move since, according to him, the RBI rules do not allow anybody to prevent anyone from withdrawing their rightful and legitimate money from the bank.

Even though Section 26(2) of the RBI Act empowers the government to demonetise through a gazette notification, in 1978 the Morarji Desai government had taken the precaution of issuing an ordinance providing legislative backing to the step even though it affected a much smaller segment of the population then. 


Frequent arbitrary changes made after the PM’s November 8 announcement  are open to judicial scrutiny. 

No one knows What the Court is doing in India..

The court may perhaps also like to examine whether the withdrawal of the legal tender status of 86 per cent of the currency in circulation violates certain fundamental rights such as the right to life (deaths have occurred and these have been attributed to demonetisation), the right to pursue any occupation, trade and business (hit by lack of currency) and the executive notification being discriminatory against the poor who are without bank accounts. 

Sources: The Tribune and TOITOI

Read further:

Why BJP Govt’s Demonetization Move Is An Absolute Disaster

Demonetisation Loot And Plunder Says Manmohan Singh

The cash crunch may paralyse economic activities in India

Demonetization may leads to Riots On The Streets in India

Rupee Falls To Near Record Low


Along with thanks and compliments to the sources for the shared data

Creative Commons Copyright © Arrested Developments 2015

Indian Government must bring legal clarity to demonetization-masked compulsory deposits

Government must Bring Legal clarity to Demonetization-masked Compulsory Deposits


PROVIDE 100% insurance cover for bank deposits

The Scheme of compulsory deposit is somewhat novel and unorthodox, which we have had to undertake in the situation created by the Emergency.”


This is not a peek from our beloved Prime Minister Narendra Modi ‘s wished-for reply to Rajya Sabha debate on demonetization. This quote is from the speech given by Late Morarji Desai, Finance Minister, in Lok Sabha during April 1963 while moving the Compulsory Deposit Scheme (CDS) Bill.

The difference between the previous CDS’ (1963 & 1974 ones), and the present one, is as big as the gulf between democracy-cum-cooperative federalism and dictatorship-cum-State trickery.

Demonetization of Rs 500 and Rs 1000 notes is a fig leaf for unannounced compulsory deposit of citizens’ all savings, implemented without imposing emergency of any type. This open-ended CDS is not provided for by any law, unlike the two previous ones for which specific laws were enacted.

Moreover, the Government has inflicted a surgical strike of austerity that has left millions underfed. It has rendered millions jobless. It has reduced vibrant life to a battle for survival.


The Demonetization-induced deaths and injuries has no parallels in the modern history.

The cumbersome procedure for withdrawal of Rs 2.5 lakh for meeting marriage expenditure by either groom or bride family reeks of Guest Control Order of the sixties & seventies.

Imposition of austerity on masses under the garb of fighting black money is a masterstroke.

It has enabled Government to abdicate its responsibility to cut its own expenditure and delay further disclosure of reports of Expenditure Management Commission (EMC).

Modi Government has cleverly packaged informal CDS as an integral component of demonetization. This has emboldened its supporters like Baba Ramdev to dub any criticism of banking mess as anti-national, pro-black money and pro-corruption.

Demonetization-camouflaged CDS has put public savings at gravest risk in India’s history. If any bank where demonetized notes have been deposited fails or is de-registered by RBI, the depositor would get paltry refund of Rs 1 lakh, even if his all deposits including fixed ones aggregate to Rs 1 crore.

This ceiling applies to depositor’s different accounts in all branches of the same bank. This ceiling has not been revised since 1993!

Modi regime has not even implemented UPA Government’s belated decision to double the deposit insurance cover ceiling to Rs 2 lakh per depositor per bank. While maintaining deafening silence on this issue, NDA Government speeded up its agenda to sell dreams to Aam Aadmi, the latest being illusionary benefits that would accrue to poor because of demonetization.

The flaws in CDS, including its brutal assault on fundamental rights of citizens, can be grasped well by recalling the previous CDS’. During 22 years of CDS ending 1 April 1985, neither economic growth accelerated nor society got reformed. Nor poverty got eradicated. Nor people developed special saving habit.

Announcing the intent to introduce CDS in his budget speech for 1963-64, Mr. Desai stated: “Like taxation, compulsory saving will restrain demand in the immediate future; whereas unlike taxation, it would provide an earning asset to the people and generally help in inculcating the saving habit in the country.”

He added: “Once the Nation imbibes the habit of saving regularly, it would have laid the foundation for its future prosperity and well-being. In fact, I would seek savings not only as an individual but as a national virtue.”

The scheme was applied to different sections of society including the ones with income below the threshold income tax level. The citizens were thus required to deposit a small part (3% in most cases) of monthly income in CDS accounts. The 4-percent interest bearing CDs were fixed deposits of five-year duration.

The Centre shared proceeds of CDS with the States, which were consulted in advance for their approval for the proposed scheme.

The Congress Government even sought Attorney General of India’s (AGI’s) opinion on CDS. In his opinion dated 28 th April 1963, the then AGI C. K. Daphtary, steered clear of issue regarding breach of fundamental rights by limiting his conditional opinion only to compulsory acquisition of money by the Government as violation of the Right to Property.

AGI appeared in Lok Sabha to answer questions put by MPs but was not invited to appear before Rajya Sabha, where some MPs from legal profession wanted to grill him.

The issue here is not AGI’s outdated opinion but the fact that the Government of the day followed democratic procedures and conventions before launching CDS.

The 1974 CDS was introduced through two diktats – The Compulsory Deposit Scheme (Income-tax Payers) Ordinance and The Additional Emoluments (Compulsory Deposit) Ordinance.

The later Ordinance was dubbed as “most obnoxious” by BJP veteran, L.K. Advani during July 1974 while condemning ordinance spree resorted to Mrs. Indira Gandhi Government. When will Mr. Advani speak on Mr. Modi’s informal CDS, which is hurting law-abiding citizens thousand times more the pain caused by legal CDS.

This brings us to core issue: Which law the Government has invoked to introduce deemed CDS and public expenditure control? All gazette notifications relating to banking restrictions and rationing of people’s hard-earned money to public have been issued “In exercise of the powers conferred by sub-section (2) of section 26 of the Reserve Bank of India Act, 1934.”

This sub-section reads as: “On recommendation of the Central Board the [Central Government] may, by notification in the Gazette of India, declare that, with effect from such date as may be specified in the notification, any series of bank notes of any denomination shall cease to be legal tender.”

This provision does not envisage rationing of depositors’ money. There might be other provisions under different banking laws under which such restrictions could be imposed.

This and several other legal complexities are expected to be clarified by the Government in its submissions to the Supreme Court and High Courts that are flooded with petitions against botch demonetization.

Meanwhile Indian Government also imposed restrictions on gold holding by individuals. Government want the public to hold paper gold.

Coming back to demonetization-enhanced risk to public’s savings, the percentage of protected bank accounts to total accounts has declined from record 96.5% in 1991 to 92.35% in 2015-16, according to RBI subsidiary, Deposit Insurance and Credit Guarantee Corporation (DICGC).

It is surprising that neither Mr. Modi nor Finance Minister Arun Jaitley have spoken on the need for providing full protection to all bank accounts during their regular sermons on financial inclusion.

NDA Government must explain to the Nation its reluctance to double the insurance cover cap to Rs 2 lakh, a decision taken by UPA in 2012-13.

NDA washed its hands off from this decision. Answering a question in Lok Sabha on 8 th May 2015, the Minister of State for Finance stated: “At present, there is no proposal to increase the existing deposit insurance cover of Rs.1 lakh.”

Keeping in view grave danger posed to banking system, Modi Government should enhance

deposit insurance cover from present ceiling of Rs one lakh to 100% insurance cover for the deposit of any value.

The issue of hiking insurance cover for hapless depositors has been studied by a few committees over the years. The last panel named Committee on the Differential Premium System for the Banks in India, observed: “In India, there has been a persistent demand from stakeholders and public representatives in the recent past for a hike in deposit insurance cover from the current level of Rs.0.1 million.”

In its report submitted during September 2015, the Committee stated: “A hike in cover without calibrating the premium rates to the risk profile of the insured banks only exacerbates the moral hazard. Recognizing this, it has been felt that introduction of RBP may be taken up to make ground for considering raising the insurance cover from the present ceiling of Rs 0.1 million.”

Let the Government walk the talk on Demonetization’s benefits for the poor by providing for 100% deposit insurance cover.

NDA also needs to separately explain why it has reduced the serious challenge of tackling black money to a cat-and-mouse game. It has to realize that it is doing the same mistake that Vajpayee Government did by amending High Denomination Bank Notes (Demonetisation) Act, 1978 to reintroduce Rs 1000 notes.

The Act says: “Whereas the availability of high denomination bank notes facilitates the illicit transfer of money for financing transactions which are harmful to the national economy or which are for illegal purposes and it is therefore necessary in the public interest to demonetise high denomination bank notes.”

(The Act in its ordinance form had demonetized Rs 1000, 5000 and 10,000 notes).

In 1998, several MPs had cautioned the Government to not to re-introduce Rs 1000 notes as Rs 500 notes were already been counterfeited in Pakistan and elsewhere and flooded into Indian economy.

As put by P.C. Chacko in Lok Sabha during December 1998, “What is the security of our monetary system? Now fake notes are being printed outside and then smuggled into India.The Government does not have any account. The Government does not have any control. The Heavens are not going to fall if Rs. 1,000 notes are not printed (read re-introduced) tomorrow; and no common man will die of starvation.”

Modi Government has now introduced Rs 2000 note, which would benefit more the corrupt and tax evaders in India and printers of fake notes than Aam Aadmi.

Good governance and common sense requires the authorities to first explain to the public all dimensions of hydra-headed black economy and corruption. The Government should have listed all options required to attack the twin malaise that have not been eradicated so far in any country.

The Government should tone down its political rhetoric on dubious benefits of demonetization. It ought to set up an independent commission to compute the net benefit/loss of demonetization-cum-CDS-cum-public expenditure control to common man and economy.

Simultaneously, it should make public UPA-commissioned three studies on black money and complete five reports of Justice Shah panel on black money. The Government should complement these efforts by issuing an action not taken report on recommendations of various committees on black money and corruption.

The Government should realize that the high moral ground, on which it is standing , would ultimately turn out to be sand, if not quicksand.

excerpts taken from the article of:

Naresh Minocha, Consulting Editor

  more to come..

Rupee Falls To Near Record Low

Supreme Court of India To Hear Challenge To Demonetization On December 2

The Trouble With India’s Demonetization Gamble

Demonetization and Freakonomics


Along with thanks and compliments to the sources for the shared data

Creative Commons Copyright © Arrested Developments 2015