ncreases in money supply provided by the central bank to counter subtraction through the SV-Tech system do not cause inflation, instead they generate economic growth. Remember that technically this is not an increase in money because this money is actually missing from the CFI, causing a money supply deficit which causes the problem of pervasive scarcity (poverty) in an economy (see the empirical test to help you understand how and why this money supply deficit exists and must be corrected by the central bank).
Correcting flaws in the CFI generates microeconomic equilibrium, within each and every business that leads to general price and macroeconomic stability.
The SVTech cost equation shown earlier neutralizes subtraction. It ensures that finances available for expenditure on non-human capital can be equal to finances available for human capital creating an equilibrium within each and every firm or business that not only increases output, but also simultaneously increases demand. This means that from day 1 and for the rest of the month a business can expect to be able to spend close to 100% of its Total Revenue (TR) on non-human or capital expenses, without any fear of having to hold back revenue and without any fear of loss of this income to human capital. This is regardless of the size of a businesses enterprise. With efficiency restored to the CFI, and all of industry in an economy using SV-Tech, being able to spend close to 100% of Total Revenue on capital related expenditure, this not only leads to increased output, but goods and services of much higher quality. Businesses are in a much better financial position to manage operations, which include paying taxes to government, servicing old loans, taking on new loans, purchasing electricity, raw materials and equipment, including other capital-related variable and fixed costs businesses in general face. Not only is output and quality rising, so too is consumption, because income that the inefficient CFI was keeping from households is also being restored by the SV-Tech system. Businesses are not only able to pay workers and shareholders better, they are able to dramatically improve working conditions and conditions of service while taking on more employees. The economy naturally has abundant resources with which to care for every man, woman and child and with which to fend off unwanted scarcity and poverty that characterized the CFI in the past. With both output and consumption rising rapidly, not only does an economy experience accelerated economic growth [a consistent economic boom], the constant balance between output and money supply keeps the value of currency stable and free from inflationary pressures. This is because increases in money supply correspond with increases in output, while both capital growth and consumption move at an equal pace (see Keynesian/Monetarist equal increases in aggregate demand and supply). This is how a national economy should be managed. To achieve this growth and stability the SV-Tech cost equation has to be implemented and managed in an economy through a financial service distributed by commercial banks and non-banks. From being subjected to a defective economy where the default position was consistent loss, scarcity, poverty and austerity, government now presides over an economy where the default position is consistent gain, growth, abundance and prosperity.
It should not be forgotten that non-human capital subtracting finances from human capital reduces demand in the economy and causes a fall in consumption equally as significant. When these two losses are combined, it reveals tremendous inefficiencies in how the CFI operates in modern economies.
Human suffering and general economic malaise is caused by scarcity. This scarcity is ever-present at any point in time in an economy as a result of subtraction in the CFI. No matter what approach in economics, development and management is applied poverty persists, unless this flaw in the CFI is corrected. Humanity has tried everything in its power intellectually, financially and systemically to either counter or end poverty and bring about prosperous economies, such as structural adjustment programmes, development aid/donor aid, identifying the poverty line in every country, poverty reduction strategy papers – year after year since 2002, social cash transfer, unemployment benefits, welfare, pro-poor policies, farmer input support programmes, winter maize, rural resilience Initiative, multi-facility economic zones, enhancing international trade, common markets, guiding the exploitation of mineral resources, foreign direct investment, using eurobonds to finance projects, employment creation strategies, raising the minimum wage, Jubilee cancellation of debt (HIPC) and so on, however, no permanent solution has thus far ever been found, but the clock keeps ticking. The reason for this lack of success in ending poverty is that the magnitude of the problem that generates scarcity in the CFI is actually far much greater than anyone could ever have imagined. Poverty cannot be eradicated because the losses it generates are simply too great and too aggressive (the equivalent of GDP per annum) and they are grafted into the very structure of the economy in the CFI. These financial losses being equivalent to GDP per annum, means that technically no domestic or international effort leveled at ending poverty can realistically counter losses of this magnitude identified in the CFI. Despite being of truly monstrous proportions, this scarcity has remained hidden in plain sight and therefore made poverty seem indefatigable and inescapable. This is why subtraction is referred to in the GPWN as the first scientific explanation for poverty. This explanation has little or nothing to do with ideology, management style or approach applied in development. Technically, this means scarcity and therefore poverty can be countered in the CFI. However, doing so requires institutions and policy makers to begin to comprehend the sheer magnitude of the ongoing problem in the CFI. It does not matter how small or large an economy is, whether it is that of a developed country or developing country the magnitude of scarcity and therefore poverty being generated by the dysfunctional and dystopian CFI is equivalent to GDP. A dose of realism is required. Unless this is understood current strategies and finances applied to end poverty and create prosperity, even by reputable international organisations engaged in the fight against poverty will fail, because they are insufficient and inadequate in comparison to the problem. And for how long can you keep revising and basically doing the same thing over and over, yet keep expecting different results? How much longer can the youth wait for one initiative after another to add nothing substantive to their future? The most effective way to counter these dissipating resources, that are equivalent to GDP per annum, and recover them is to use the system itself to recoup and mobilize these resources using the CFI, taking direct control of the problem, reversing it and putting it work for the economy. This can be done. It means that human beings are not meant to suffer, poverty is not an indelible aspect of human socio-economic existence, in fact, the opposite of this is true: humanity is meant to prosper and has tremendous resources at its disposal to do so.
However, this wealth, these resources, abundance and tremendous prosperity is locked away from humanity and kept out of its reach by losses to subtraction in the CFI that neo-classical economics has not identified and cannot see. An analysis of the modern CFI shows that these combined financial losses are equivalent to a nation’s GDP. (Most people, even intelligent, highly educated neo-classically trained economists are unable to process or comprehend an annual loss of this magnitude (finances equivalent to GDP per annum); which means they also fail to process how recovering it can raise financing equivalent to GDP in one year at constant price, with which to accelerate economic growth.
For any government, private or public institution to sit back and allow useful economic resources to be lost on this scale while so many people are suffering, while people cannot get high quality treatment in hospitals because there are no resources for medicines and equipment, while children who should be in school and live in happy homes walk the streets at traffic lights begging for alms from motorists, while so many individuals and family’s fail to rent or buy homes, while development projects are standing still or workers are going unpaid for months due to inadequate funds and while businesses struggle to stay afloat is simply criminal. In any other industry or profession this failure would be classified as culpable professional malpractice. No court or justice system anywhere in the world would allow this to continue.
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