We will resume our initial sectoral approach, involving four sectors, sector.1 goods production the sector2 property consumption of the sector3 'virtual' intermediate goods and industry4, representing the production of public services .
With obvious notation we have, for i varying from 1 to 4:
PROD = ADP + + AMOR SALI PROFi + + + RMDi Gouves
The only restraint industry4 specificity will be that, Traditionally, the public sector makes no profits, there will therefore PROF4 = 0 (but it would not matter if PROF4 was greater than 0)
In models two and three-sector outlined above (which represent simplification of national accounts tables, with notations personal AMOR depreciation of physical capital, MAT for intermediate consumption, SAL for wage income and profits for PROF) we already noted, of course, that the amount of CA production sectors is obviously much higher than the GDP (due to various exchanges between sectors during the process).
GDP will be equal, the same way as above, to:
PROD1 & 2 & 3 & 4 - AMOR1 & 2 & 3 & 4 - MAT1 & 2 & 3 & 4
And we find, of course, that the GDP is also equal to the Value Added, itself equal to
SAL1 & 2 & 3 & 4 + PROF1 & 2 & 3 + RMD1 & 2 & 3 & 4 + GOUV1 & 2 & 3 & 4
We simply allowed to consider that public officials, all employees in industry4, had wages, not 'treatments' (to simplify the notations), and assumed that the profits of that industry4 were zero.
RMD1 & 2 & 3 & 4 or REX1 & 2 & 3 & 4 are also what some call the Social Dividend, GOV is the tax paid by each sector (we have integrated the 'production process' is one of many possible choices). GOV RMD and thus correspond to "rights holders" to "unearned income" over the various 'production process'.
With a balanced budget, we would GOV & & 2 & 3 & 4 = PROD4 (taxes just balancing the production of industry4, the public sector) but this is not essential to the coherent functioning of the model.
We'll take a numerical example to fix ideas, assuming (many more could be selected) that Rexi and GOV are both taxes on value added , the same rate as taken by sector (but you can choose quite another thing, if 'politically one so decides).
So, for i between 1 and 4, it will take:
Rexi or RMDi = (SALI PROFi +) * MSY rates, and similarly
GOV = (SALI PROFi +) * tauxGOUV
The LDR (Low Income Dignity) - REX - is distributed on an "out process", whereas GOV, taxes 'traditional' are only paying for the production of industry4, the public sector (including staff salaries).
If one wants make figures more or less realistic, one could imagine that tauxRMD is about 20%, and the GOV rate of 30%.
PROD1 = 1920 = 600 + 400 + (690 + 230) * (1 - txRMD - txGOUV)
+ (620 + 230) * (+ txRMD txGOUV) (Sector "capital goods")
prod2 = 1200 = 150 + 250 + 600 + 200 (Area "consumer goods")
PROD3 = 1200 = 700 + 350 + 100 + 50 (sector 'virtual' intermediate goods)
PROD4 = 1000 = 300 + 200 + 500 (no profits in the public sector)
Or, by decomposing the value added by SAL + + LDR + GOV PROF:
PROD1 = 1920 = 600 + 400 + 345 + 115 + 184 + 276
prod2 = 1200 = 150 + 250 + 300 + 100 + 160 + 240
PROD3 = 1200 = 700 + 350 + 50 + 25 + 30 + 45
PROD4 = 1000 = 300 + 200 + 250 + 100 + 150
was then:
INV_N = 1920 to 1750 + 1200-1200 = 170
(= PROD1 & 3 - AMOR1 & 2 & 3 & 4 - MAT1 & 2 & 3 & 4)
Wages = SAL1 & 2 & 3 & 4 = 945
Profit = PROF1 & 2 & 3 = 240 = RMD1
Social Dividend & 2 & 3 & 4 = 474 Taxes other
GOUV1 = & 2 & 3 & 4 = 711
GDP is equal to INV_N + + prod2 PROD4
= 2370 Value added = PROF SAL + + LDR + GOV = 2370 (not surprisingly ...)
This production "net" amount after what has been "consumed" in different production process, takes the value of 2370, and is broken down into 170 Net Investment, 1200, consumer goods, and 1000 public service.
If we wanted to balance the state budget would have required increasing the txGOUV and make close to 42%, diminishing wages and profits "dealers" and possibly the Social Dividend, which would change obviously not possible to "accountants" to purchase the entire production, and the accounting balance between GDP and Value Added (or National Income)
course, these equalities accountants do not resolve the issue of "paragraphs by financing various production processes.
The first question in advance to be granted to 'producers' (or the corresponding companies), the timing of the advance, and the corresponding amount.
Specifically, does it fully fund the "production costs", or stop to finance capital expenditures (AMOR) intermediate consumption (MAT) of wages and net profits, financing and governance of REX is done directly in the end times, from having rights, which would raise the issue of funding for treatment officials (considered here to be equal to 500)
These are of course tracks funding that we are dealing with the needs of working capital "material" can be advanced by the banks under control of a Office National du Credit (or other governing body), funding for salaries and benefits that may be funded or not, differently, the NCB issuing currency directly intended to pay Rexi and other taxes, GOV.
Whatever the method or methods used, the model shows clearly that full funding of the production process can be operated entirely by money creation original, creative destruction resulting in the same end processes. The issue of investment (and thus savings) is a false problem, since the value-added another name of national income, is "accountable" equivalent to the GDP.
The last question - but it is great of course - is the necessary synchronization and consistency between purchasing opportunities (demand 'solvent') and offers (the 'production'). We need that money be available at the right times, and used by the right people, assuming they are good products that are made for the right needs.
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