One note of caution is in order, however. While a growing economy needs a growing money supply, there is a slight technical lag between the time that the banking system creates money for new capital acquisitions and the time that such productive assets are actually placed in production and begin to produce income to complete the credit cycle. This has a minor and temporary inflationary effect, but one that is more than offset by the long-term counter-inflationary impact of the binary growth model.

The key to understanding this author’s optimism is the recognition that the present economic system fosters many leakages and enormous wastes of human creativity, commercializable advanced technologies and nonproductive uses of natural and man-made resources. The binary growth model would close most of these leakages and reintroduce these wasted resources for the production of marketable goods and services. This very logic of the binary growth model would thus raise the physical production and sales of marketable goods and services far beyond current levels without raising production costs in the short run, and by actually lowering production costs over the mid- to long-term. Moreover, any minor adverse effect would be counterbalanced, even in the short-run, by reducing structural inflationary pressures in today’s economy caused by:

• unnecessary and inefficient barriers to enterprise competition,
• vastly underutilized U.S. plant capacity and U.S. manpower,
• costly resistance by organized labor to automation,
• needless strikes, slowdowns, and worker sabotage,
• continually rising labor costs in the face of a continuing displacement of labor inputs resulting from technological improvements,
• more "created" jobs on government and subsidized payrolls to absorb technologically displaced workers who are unwilling or unable to find satisfying private sector jobs,
• higher taxes at all levels of government,
• expanded welfare and unemployment rolls,
• artificial consumer demand created by easy access to consumer credit,
• continuing government deficit spending and rising interest for non-economically productive spending covered by the national debt,
• and many other "demand-pull" and "cost-push" pressures on current price levels.

More enlightened national fiscal and monetary policies, geared to "full ownership" and "full and sustainable production" (instead of artificial and dehumanizing expedients to achieve "full employment") could easily adjust for this minor problem. In no way, however, does it justify any further delays in restoring health to the U.S. economy and greater efficiencies and fairness in how capital ownership and mass purchasing power is distributed.

Part 10