National Credit is a currency system designed to distribute the purchasing power that is normally lost to inflation to the people who need it most. Simply put, it is a Mutual Credit System, supported by law, that continuously exerts dis-inflationary pressure by expiring equal amounts of money and debt. The expiration rate is chosen to be slow enough so those who earn money can accumulate physical wealth, but fast enough to retire the debt of individuals who must borrow to meet their daily needs.
National Credit is based on the idea that credit is a product of association, and that the creation of money involves risk that is shared by all of society, since in the final analysis it is society that must make good on the claims that money represents. Therefore, a currency system is a collective responsibility that should be collectively administered. This doesn't mean, however, that credit should be allocated by government officials; rather credit should be allocated, to the extent possible, by the application of analytic formulas operating on hard data, and where necessary or desirable, by the deliberation of private citizens who have some stake in the outcome.
National Credit rejects the underlying principle of current economics, which is that purchasing power is only distributed to the owners of capital and their employees. Economists go to sometimes fabulous lengths to purport to show how such a system could work, despite the fact that technological advance long ago made the majority of the population unnecessary as employees. Rather the underlying principle of National Credit is that, at a minimum, production should be targeted to the size of the population, with enough excess to reward those who are involved in the productive process, and that, freed from the anxiety and frustration of having to continually grub for money, people will turn their energies to the small-scale production of goods and services, with a level of quality impossible to achieve with mass production or consolidated services.
National Credit asserts that any system of currency which treats money as a permanent store of value will continually depreciate until it fails, resulting in either catastrophic deflation or the substitution of a different currency. That rather than face up to the situation, various practices are undertaken, the excesses of which are known as usury, profiteering, speculation, and even robbery. That those practices only hasten depreciation by adding unnecessary costs to the system, and are geared to keep the ownership and control of physical wealth in the hands of the fewest number of people as possible. Instead, National Credit provides for the use of credit, rather than money, as capital, with ownership reverting to the state in the event of default, and relieves the need for the investment or saving of money by ensuring a basic standard of living for all.
