Educational Research Analysts  June 2009 Newsletter  
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How might these Christian Economics texts improve?
– A Beka Book ©1999
– Bob Jones University Press ©1998
Connect Christocentricity To Monetary Policy
Jesus Christ the Personal Word of God is the Father's only-begot­ten Son.
The written Word of God is thus absolutely authoritative for all times and places.
Scripture forbids deliberate monetary debasement/inflation ("deceitful weights"). (Lev. 19:35-36; Deut. 25:13-16; Prov. 11:1, 16:11, 20:10, 23; Amos 8:5-6; Mic. 6:10-11) The root word for shekel means "to weigh." The term "weights" is a Biblical equivalent for "money."
Israel was on parallel standards (not bimetallism). (Gen. 23:16; I Chron. 21:25; Jer. 32:9-10) Everything had one price in silver, another in gold. The market set exchange rates. The state could greatly multiply silver or gold at any one time, but not both at once. (Deut. 17:17b)
Christ's necessary divine atonement for sin shows man is too corrupt to save himself, unfit to exercise sovereignty in economics, subject to God's Word on monetary policy.
God's Word distinguishes tax rates from tax revenue. The more government taxes transactions in the greatly-multiplied monetary medium, the more its revenue falls as the private sector shifts to the other. The more the state spends its greatly-multiplied monetary medium, the more its purchasing power erodes.
In loans backed by one's labor in case of default, one could borrow up to 6 years' wages between Sabbath years. If government greatly increased silver, it could not increase gold enough to devalue the gold shekel over 6 years lest it defraud creditors and oppress debtors (in inflation, prices rise faster than wages). Hence government could increase the supply of the non-greatly multiplied monetary medium very little.
Biblical principles shield commerce, interest rates, insurance, pensions from risk due to the state's propensity to inflate. Contracts would stipulate payment in the monetary medium whose supply was more stable.
This rule discriminates between productive and unproductive consumption. It bars simultaneous great increase of both monetary media by the state (the unproductive sector), but not by private entities (the productive sector).
Voiding state power to redistribute wealth from producers to non-pro­ducers through monetary expansion maximizes production.
Support for maximum production (Lev. 26:5,10) is supply-side economics, which says supply creates its own demand. All producers are consumers. Producers spend on other goods, the net wealth (profit) created in their own production. In free markets, increased production in one sector raises demand for the goods of other sectors, and vice versa.
Supply-side economics negates demand-side economics, which calls for deficit spending by the state to boost consumer demand, violating Biblical principles where that involves greatly inflating the single monetary medium. Supply-side economics says demand does not create its own supply. Not all consumers are producers. The more that inflation – a form of taxation – shifts consumption to the government or to other non-producers, the more production declines.
Maximum production rules out price ceilings, which prevent it (rising prices boost production), and price floors for goods ("parity prices") and services (minimum wages) which create unmarketable surpluses of inventory and labor.
Maximum production demands low taxes, which stimulate it. As production grows, lower tax rates often yield higher tax revenues.
More production means falling prices, rising purchasing power, higher living standards.
No government influence over the unregulated monetary medium means no price controls on its interest rates. Market interest rates accurately signal investors on future consumer demand, avoiding general mal-investment and economy-wide booms and busts ("business cycles").
If the state cannot greatly expand the single monetary medium, it cannot empower fractional-reserve banks to tax the public by inflation for private gain. The U.S. Constitutional Convention voted down permitting federal emissions of "bills of credit" (unbacked paper money) and federal charters of corporations such as banks.
Forbidding government to greatly expand the single monetary medium hobbles the welfare state, which requires inflation to help fund deficits.
Without control of the money supply, the state cannot "stabilize prices" or impact foreign trade through monetary policy.
Maximum production requires free trade. To sell its goods abroad, a country must open its markets to other nations so they can sell there in order to be able to afford to buy.
To maximize production, a nation must exploit comparative advantage in foreign trade, selling what it can produce most efficiently without state subsidies, which misallocate resources and lower living standards.
The Bible favors international economic interdependence, which arrests human sover­eignty, but not international political interdependence, which asserts it.
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