Understanding Deflation

If the denominational supply of money is $100, and your counterparty has consolidated 100% of that value, you have two choices, starve or go into debt.

The problem is not that there is a debt, but that the counterparty controls all of the equity (all of the risk). The debt obligation and the subsequent ability to pay it (the risk of default) are consequential to the problem. The consequences accumulate into a crisis proportion (the effect) and default becomes the problem (the risk) to be resolved.

As the wealth consolidates, your income is deflated. The result is a general crisis. Your lack of income is not the source of the crisis, consolidation of it is.

Understand that deflation is a general crisis. You can't get any poorer, and your counterparty can't get any richer without over-extending (over-leveraging) the risk.

The crisis becomes so extensive that even though it appears you are getting richer, you are really getting poorer. Your income is so over-leveraged that your equity is now negative. Both rich and poor have debt that cannot be paid with the risk of loss having been fully consumed by the working financial model.

The crisis will not resolve without changing the working model, which is imbued with normative value. In fact, changing it is considered an ontological, moral hazard. Nature intends risk to be consolidated to the fullest extent and discretely distributed to control the risk of loss that is fully assumed. Otherwise there is chaos. Humanity is then reduced to mere animals suffering the vicissitudes of uncontrollable natural forces that lack civilized purpose. It is necessary to de-ontologize the risk so that it can be managed with intelligent propriety (as the private property of elite authority).

The elite are naturally endowed to consolidate and manage the risk of loss, fully assumed, to a civil purpose. Despite all the negative equity, according to the elite hypothesis, the result is a net benefit--civil society organized to control nature in the form of private property in pursuit of the "good" life.

Private pursuit and management of property does afford the freedom, the propriety, of a moral existence. It does deontologize a more natural existence, but it is a mistake, as elite authority maintains, to consolidate the risk into economies of scale in order to control random chaos.

The free market mechanism, which is reduced by economies of scale, ontologically rewards and deprives on a deontological basis--by popular consent (the randomness elite authority intends to control to a civilized purpose). If you can't trust your bank not to use your money against you from its proprietary desk, pluralism (what an economy of scale is not) ensures you have a choice (the freedom to deontologically reward and deprive).

Ontology is a philosophical concept that is a measure of intention, or what economists ascribe to incentive. If a student studies to get a good grade, the student is teleologically determined. If a student studies to know the curriculum to the highest degree, a good grade is ontologically determined. While both can result in knowledge of the curriculum, the incentives are different and can affect the practical quality of the knowledge consumed.

The profit motive works in much the same way. An entrepreneur may make a product or service better and faster to make a profit, or may just be interested in doing things better and faster which ontologically results in a profit. A free market mechanism maximizes the productive incentive of each to occur by minimizing the probability the profit motive does not consolidate the risk to prevent the ontology (with the risk of loss fully assumed).

Whether the goal is to ensure a profit margin by determining the risk of loss, or a profit margin that is the result of doing things better and faster, a de-ontology occurs to determine the extent of the risk (how the risk of loss is to be fully consumed).

Ensuring a free-market mechanics in priority ensures the deontological existence elite theory promises but does not intend to achieve by "virtue" (the strength) of command and control.

Ensuring a natural pluralism in priority (instead of an economy of scale) ensures freedom, deontologically determined. As a species, being cognitively hardwired for causal determinism, pluralism ensures we have a choice to achieve a natural existence that is self-determined as opposed to a purely natural ontology which, unlike Rousseau's noble description, according to the elite, is to live like ignoble savages.

Naturally, the elite also extend the ignominy of Rousseau's ideal measure to pluralistic processes that govern their self-interest by means of popular consent. Pluralism, as John D. Rockefeller argued, for example, is unruly and inefficient, so it naturally selects those (such as himself) who are fittest to force their self-interest in the marketplace by consolidating it, thus organizing it, or civilizing it, into a proprietary authority (much as Marxist-Leninists describe it).

The fittest to survive are those that are literally "too big to fail." These are the people most willing--morally incented--to de-ontologize the marketplace and consolidate the equity into debt; or as Marx and Lenin alternatively described it, to consolidate the equity into the Sovereignty of The People, keeping in mind that the more debt The People accumulate the more they own the bank with denominatively negative equity.

Yes, we are more than just animals, but achieving negative equity is not the civil way to confirm it. Rather, it is quite the uncivil act of authority (which is why forming "trusts" or what is "too big to fail" is supposed to be illegal).

If starvation or debt is the choice, debt becomes the more natural existence, and that is the choice we now face as we consider our economic problems toward a civil resolution.

Notice how the current commission to control the expansion of debt has virtually nothing to say about deconsolidating what is too big to fail. Apparently, just as the congress and the executive, the commission does not consider the consolidation of industry and markets to be of negative consequence (i.e., causing deflation and debt). This confirms that debt is considered to be, in true Hamiltonian fashion, the more natural state of our existence.

Keeping the risk (the equity) in a continuous state of consolidation is assumed to be the natural course of things, like Rockefeller argued, but keeping it solely proprietary naturally causes the need for government. The debt to equity is kept under close state control (monetary and fiscal policy) but denominatively proprietary to keep the equity stake ontologically incented with productive self-interest. Unfortunately, the stakes reduce to debt or starvation which, frankly, could hardly be more base. (Marxist-Leninists argue that as this consolidation becomes more civilized, productive incentive reduces less to the base and elevates to a self-determination that is technologically pulled by labor-saving devices. We currently refer to this "pull," this ontological determinism, as "unemployment," and Marxists "the leisure class." Without entitlements, or transfer payments in the current environment, the leisure will result in a deflationary crisis--the income will not be available to demand productivity. Of course, being able to afford leisure delimits socio-economic class, and the leisure class must work to maintain the delimitation by limiting the extent of entitlement--the extent of liability--to a debt obligation which, of course, accumulates into a gamma-risk proportion. Instead of buying time to commandeer available equity, productivity eventually occurs for its more equitable distribution and enjoyment. A person does not acquire a job or achieve an equity stake by depriving it of another person--by deflating another person's equity stake, or entitlement.)

To de-ontologize the gamma-risk proportion, the debt commission is to suggest ways to adjust the debt to equity. The proportion then gains civil authority (due process) to mitigate the risk of liability that results from deflationary trending in which those that have and have not are more clearly defined in zero-sum--what the rich refer to as "class envy."

Class envy in a deflationary environment is nothing but being basely reduced to accepting debt or starvation as a matter of self-determination (by natural right). When the economy is expanding (when the equity is being distributed and debt reduced), people naturally care less about the difference between rich and poor because there is, in fact, less difference. The discrepancy, the conflict, is essentially about entitlement. While the rich claim they are entitled to wealth and leisure, everyone else, by definition, is not. Without basic entitlements for everyone provided by the so-called liberal faction, the risk of liability (referred to as envy) is de-ontologized.

The deontology (the missing interpretation that defines the limit of a natural existence) allows for a more equitable distribution of the risk that "naturally" occurs (the risk of loss is fully assumed). America's founders, for example, demanded a more equitable self-determination of the risk extended from the king. They called this "equity" a "natural right." The king, of course, thought differently...the Revolutionaries were just envious of royal wealth, power and leisure (which includes the time to exercise power and limit the risk of loss that is fully assumed).

Currently, with the risk of loss fully assumed in zero-sum, American government is engaged in due process to determine (deontologize) the extent of entitlement which accounts for the debt (the risk) that accumulates without equitable distribution. With the public debt measuring the extent of the risk (the amount of potential inequity to ontologize in zero-sum), a $13 trillion denomination indicates an impending crisis (deflation) of colossal proportion. So, who is entitled to the debt? To whom shall it be commissioned?

Is it possible to pay the debt without starving?

It is important to understand that deflation is how distribution of the equity occurs and the Deficit Commission is dealing directly with an overvalued deflationary indicator that defines who is entitled to what, and when.