Relational Economics

Four problems:


  1. sustainable energy,
  2. climate
  3. unfunded pension funds and health care obligations,
  4. income inequality
  5. universal income
  6. arms race

easier to solve as one piece then to resolve separately.

show you. principle is need to be solved in an equilibrium. in one equation.

Count six. Overlap. Interrelated. Six are four. But really one problem.

I am Embarrassed to Say This … Because Fixing Capitalism is this Simple

We will make energy from the sun into a capital asset for everyone.

That’s it.

And that will fix more than just capitalism.

We will cure, in the same motion, political injustice in the realm.

The realm of inequality of opportunity. The realm of want. The realm of fear.  The realm of oppression.

We  can spin this blue orb and transform the cold night into the  light and warmth of a new and brilliant day.

How? Like this.

Solaereum bonds will be used to purchase the shares of public companies. The bond holders will be …. you.

And you.  And you, too.

The value of your capital assets will grow as we transition to clean energy.

To be honest, Solaereum bonds do not fix capitalism. Solaereum bonds are a continuation of the evolution of economics through the reinvention of the context of capitalism.


Capitalism: Approaching its Own Singularity

As  wealth concentrates, capitalist economies  approach singularity.

Singularity get closes as R > G continues to be an economic reality.

R > G is driven by the network effect.

The network effect drives wealth concentration.

A national economy approaches singularity when the network effect creates an event horizon … from which money cannot escape.

Singularity is reached by a nation’s economy when wealth concentration causes malperformance of an economy.

Backing away from the event horizon and establishing an economy

in which taxpayers are equity stakeholders, is achieved by making

the energy from the sun into an income for everyone.

This is the mission of Solaereum.


This is how we end the network effect.

This is how capitalism evolves.

This is how capitalism works for everyone.

Resources are capital.  Capital is a necessary component of freedom.

Solaereum provides a capital resource to all taxpayers.

Eliminating external diseconomy created by tax breaks.

This is the mission of Solaereum.




The Biggest Big Idea >>>

[Solar energy is a resource generating a universal basic income.]

Develop solar energy into a resource that provides a universal income.


The income is paid for by a tax credit that is used to make the economy bigger.

The income is derived from a tax credit that stimulates economic activity which expands GNP and generates positive net tax revenue.

A tax credit which turns the wheel to make the economic pie bigger.

Energy from the Sun and the Universal Basic Income

Solar Energy is a resource that provides enough energy every hour to provide all our energy needs for a year.

SolarMethod is not talking about a future of free energy.

SolarMethod is about generating a growing, universal income as we monetize the sun’s energy. Possible because monetizing the sun’s energy expands the economy.

We pay for energy. The universal basic income comes from the economic growth, which is a function of  energy use.

Tax credits and monetary growth.

Linking tax credits and monetary growth creates the basis for self-funding tax credits.  Tax credits are not a zero sum calculation. That would be unsustainable. The tax savings resulting from tax credits are monetized by SolarMethod and donated to a 501(c)3.

The 501(c)3 acquires shares in a publicly traded company, such as an equity REIT and conveys those shares to working households. REITs generate dividend income for shareholders. Equity REITs leverage assets, thus expanding the money supply. As the money supply expands, tax revenue grows. Federal taxes currently net 18.1% of GDP. Due to the velocity of money, currently 5.71, a $1.00 increase in the money supply results in tax revenue of $1.03.

An equity REIT with leverage of 50% will generate $1.03 in tax revenue for every dollar in tax credits issued.

An equity REIT which has a debt equity ratio of 33.4% will generate $2.06 in tax revenue for every dollar in tax credits issued.

And so we fund a universal basic income which grows as the economy expands.


The Evolution of Capitalism: Design of Self -funding tax credits

A tax credit is self-funding when the concomitant economic activity (generated by the tax credit)  results in tax revenue which exceeds   the tax credit.


Use the tax credit in a way that increases the money supply.

Now the velocity of money takes over.

Federal tax revenue is approximately 18% of GDP.

GDP = money supply multiplied by the velocity of money.

Every dollar increase in the money supply is multiplied by the velocity of money.

Velocity of M1 is 5.74  (variable by time of year).

18.1% of 5.74 = 1.03

Federal income tax, state sales tax, state income tax (in some cases)

Use this method to transition to clean energy.

Use to create tuition free education.

Look at Solar.

Due to the way we invest the ITC, SolarMethod generates positive net tax revenue, functionally accelerating the transition to clean energy.

1. Because the ITC gets invested in an equity REIT,

2. and the equity REIT has a debt equity ratio of 33.4%
3. then borrowing by the REIT results in a $2.00 increase in the money supply for every $1.00     invested in new REIT share issues.
The velocity of money (M1) is 5.74.
If that $2 increase in the money supply turns over 5.74 times per annum,
then the increase in GNP is $11.48.
Federal tax revenue is in the range of 18% of GNP.
The $11.48 increase in GNP results in $2.07 in additional federal tax revenue.
The ITC costs a $1.00 in tax revenue but, as invested, generates $1.07 in net revenue.

2.  Collect tax revenue from the increased economic activity.

Predicated on a velocity of M1 of 5.74, those two dollars will generate additional GNP in the amount of $11.48.
Federal tax revenue is 18.1% of GNP. 
Additional tax revenue generated = $2.07.
The tax credit equals $1 of tax revenue foregone,
so net positive tax revenue is $1.07.
Assuming that the REIT does borrow two dollars, and that the velocity of M1 stays at historical levels, is this analysis correct?
A Tax Credit that Generates Net Positive Tax Revenue
Equity REIT debt  ratio = 33.4%.
Federal Tax Revenue is 18.1% of GNP.
Every dollar invested in a REIT generates an increase in the M1 money supply of $2.00
Due to the velocity of money, which is 5.741 for M1, each new dollar generates $5.74 of GNP.
$5.74 x 2 = $11.48.
$11.48 x .18.1% generates $2.07 of new tax revenue.
So, the investment tax credit, which costs $1.00 in tax revenue, generates net positive tax revenue of $1.07.

What is ‘M1’

M1 is a metric for the money supply of a country and includes physical money — both paper and coin — as well as checking accounts, demand deposits and negotiable order of withdrawal (NOW) accounts. The most liquid portions of the money supply are measured by M1 because it contains currency and assets that can be converted to cash quickly. “Near money” and “near, near money,” which fall under M2 and M3, cannot be converted to currency as quickly.


Using M1 as the definition of a country’s money supply references money as a medium of exchange, with demand deposits and checking accounts the most commonly used exchange mediums following the development of debit cards and ATMs. Of all of the components of the money supply, M1 is defined the most narrowly. It doesn’t include financial assets like savings accounts. It is the money supply metric most frequently utilized by economists to reference how much money is in circulation in a country.

Look at Education


Free college

  The self-funding tax credit.

A company funds a student. The company gets a tax credit.

The tax credit is monetized.

Funds are donated.

The funds are used to buy shares in a private equity firm which buys a business, which employs students.

The private equity firm would use leverage of 2:1.

Borrowing, increase in the money supply, money created is on the ‘Eduction Standard’.

Tax revenue generated would fully offset the cost of the tax credit.




A tax Credit that Generates Net Tax Revenue

The most important concept in the history of economics  is design of a tax credit which creates tax revenue exceeding the cost of the tax credit;  A tax credit that generates a net tax revenue increase.

1. It benefits working class in a way that generates tax revenue which involves increasing the money supply.

2. Because its private sector spending.

3. The tax credit enables usage of a time dependent resource that is unharnessed and thus going to waste.


A Standard of Value for Currencies


Dollar pegs create debt servicing issues when the dollar appreciates.


Create a standard of value for the dollar. Not gold.

The standard of value: Energy Use Productivity.

The Energy Standard.

Energy use x energy efficiency = the standard of value

Energy efficiency is  specific to national economies.

Money supply is pegged to energy efficiency.

Money supply increase is pegged to increase in energy efficiency.

Money supply increase is pegged to relative energy efficiency.

Of course, the Euro economies would not have the problems of being in lock step.

Of course, companies would not have to employ expensive hedging strategies.

An economy’s  money supply would increase based on energy growth as a function of efficiency.  Because of the creation of a standard of value.

Just another WordPress site