The House Bond Global Pareto Vs The SWF Political Exploit-HPF Nominal Slave Society

The House Bond Global Pareto 

Vs 

The SWF Political Exploit-HPF Nominal Slave Society

PrasadRao

MTech, MS, (PhD PennState)

Energy, Environmental and Mineral Economist

gprasadrao@hotmail.com; gprao64.blogspot.com

Click here for the pdf

Foreword and Disclaimer

Economists are universally envied for the Wealth and LQ they create, but derided for theirshort-sightedness in matters environmental and social, not to mention their upturned noses when comes time to admit shortcomings! The design presented below offers a far-sighted, comprehensive,and universal social resolution to the explosively unsustainable Nominal economic paradigm,restores Real-Nominal balance, and obtains aperpetually pareto socio-economy. Thedesign leans on both, quantitative and non-quantitative characterization of Goal variables, leans on Sovereign Bond and Gold markets, leverages continued Household participation and co-operation with Businesses, and global co-ordination across societies and economies. Such goal-seeking participationis rewarded, beyond the incrementalaccumulationof a ‘Precinct Perpendicular Property PV Hedge’,with the generationof Growth and Dividend Yield Capital, as well as Working Capital sought by CC and OpCy firms. Thedesign relies on formal, objective,and formulaicquantitative (Apps), FV-incentivizing mechanisms, FV-Monetizing logic and PV financial instruments and markets to secureits outcomes.

As with any holistic and forward-looking design, the proposal made here does not necessarily dovetail with existing institutions, rules and regulations. The conception proposes constructs, strategies and operations that do not synchronize with the Nominal financial system.Further, and given a grand design that necessitates cooperation across Precinct Religion, its Privates and local Government, as well as interactionswith national Bond and Equity markets, global institutions, and which rivals the Capital market in its impact, modesty is, but appropriate. The Author makes no claims as to the comprehensiveness, accuracy or success in the operation of the proposed design, and distances himself from any and all liability that might arise from its implementation.

1 Introduction

Who hasn’t heard of the Household Production Function, or the Social Welfare Function appended with the Arrow Impossibility Theorem…. ie, barring the Econ 201 undergrad ‘outlier’ who jumped to Psych 102on his girlfriend’s Invite! If Economics transitioned from the Public allocation of scarce resources to the optimization of Private enterprise, and caught the fancies of a myriad math-oriented economists, those economists didn’t waste any time in extending their optimization to the Societal Private space – the Households. And despite the widely-held view that an expanding socio-economy would grow in a balanced pareto between Households and Businesses, economists – micro-economists, but particularly Macro-economists, have been too receptive to the demands of the Nominal Reich and the Right in subverting that balanced pareto to their advantage. Consequently, what could have been an utopia from the confluence of abilities and skills, foresight and planning, effort & research, innovation & technology, social expectations and political direction, has instead turned in to a mere statistic for economists to sub-optimize while maximizing Nominal GDP growth, and skewthe incidence of that growth to favor the Reich, the politically-connected, and those occupying the avian world of towers and high-rises. As the Nominal paradigmexplodesglobally, and in to the unlimited expanses of the Space economy, the accompanying environmental & social externalities, as well as the associated Nominal hedges, inflate Gold. This PV Gold-hedged Nominal only worsens social and economic inequity, perhaps irreversibly, and dooms humanity to a schizophrenically-divided future. The House Bond conception, elaborated below, offers a defensible and credible strategy to recover and retain social balance apposite to a technologically-driven Nominal economy. 

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7 The Nominal 'Checkmated' - but who will bell the Cat?

The Micro-economically-founded Household Production Function, HPF, and the macro-economically-envisioned Social Welfare Function, SWF, are two well-known constructs that focus on Households – the former at the Household level, and the latter at Precinct or National aggregate. Though Household centered, the constructs have different motivations. The HPF seeks to characterize (and modify) incentives faced by Households for participating in the Nominal economy, whereas the SWF focuses on longer-run and aggregate indices that measure Societal heath in multiple directions with an intent to compare them temporally and cross-sectionally and focus political attention toward obtaininga globally-conformable egalitarian society in the long-run. One wouldn’texpect any Real design to emulate the brevity and quantitativepreciseness of Nominal designs. However, Real designs encompass a significantly larger, ‘Time 6G -Space 6D’ context, and potentially, extend beyond narrow andparochialpursuits to universal, and holistic sustainability. Real designs recognize the Family-Households, and its inter-generation evolution,as the basic building bloc of the society, and its dual role in the Nominal economy of their Precinct. They permit of, and rely on Household and Publicparticipation to stake a balancing roleopposite the Nominal economy, both as suppliers of Labor to Capitalists, and asConsumers of outputs and services offered by a dynamically-evolving technology. The proposal detailed herecombines macro-economic elements, with Sovereign and Social Finance, along with a micro-strategy to re-orient Investment and Consumption engaged in by Households, to put together a design that obtains a Consumer-driven attenuationof Green and Social externalities even as they generate Socially-pareto Household EO Capital compatible with Growth firms seeking the Dividend Yield refuge. Built around voluntary participation, private Household-interest, public societal interest, and pareto opportunities with listed Nominal- and Externality-Remediation Environmental- and Social- Businesses, as well as the prospect of obtaining business-pareto Firm (and Working) Capital, the design is guided by publicly- and privately verifiable, quantitative constructs andinstruments that indicate the state of the Bond, the degree of conformance byparticipating Households, and by arbitrages involving cross-Precinct, financial constructs (Real:Nominal ‘Normals’)deviations from which are penalized across Precincts or Nations, and which hence incentivize policy correctives to obtain Bond goals and objectives.

Conventional social Micro-theory, as exemplified by the HPF,examines data-quantified Household behaviour econometrically, to predict such matters as Labor-Wages-Leisure trade-offs, and female participation in the Labor force. Parallely, the Social Welfare Function too, although a half-step in the ‘Real’, Leftdirection, is handicapped by theoretical and empirical constraints, that limit its applicability at the micro-societal tier. Conversely, the design presented here employs Households as the building block of the society, and as willing participants in partnering the Technology-driven Nominal economy. Whereas the HPF essentially models Households as ‘OB Follow Appendages’ in the larger optimization of ZS PV Profits in the global Nominal economy, the House Bond is a Precinct-centered Real construct that offers Households Green and Real incentives to nurture their families from inception as wedded Couples, generates Green and Social Capital apposite to the DividendYield economy, and reverses an unbalanced, Green(&Real)-atrophied, politically-directed and Nominal-leaningsociety toward balance and sustainability compatible with explosively-enlarging Technology.

The House Bond is essentially a Real construct that integrates Households with their Precinct society, and permits them to participate in achieving a long-run PrecinctCause, even as they grow their familiesand seek pareto niches in to the Next – whether abroad, or locally in to the Next. Unlike the micro-economic HPF, or the Macro SWF, this design is financially-incentivized and integrated with the Household-generation of both,Dividend-Yield and Growth Capital. The prospect of a safe and productive living that permits them to make cost-minimizing, long-run decisions, the incentive to dovetail socially toward a Next Offer, and the opportunity to tailor Household consumption toward generation of Green- or Social DividendYield Capital that they could share in as a Social Exit Lumpsum, incentivize Precinct families to participate as Real Families in the House Bond.The design anticipates the implicit incentive to form and grow large families with a pre-emptive ‘First-excused’ Baby Tax that requires Couples seek social support in the form of Sovereign Bonds that are bartered for the BabyPermit.

It conceives of an over-arching financial construct, centered around Mint-Sovereign-issued FV Gold and Sovereign Bonds. The design leverages Sovereign Bonds distributed in Couples at their Wedding to record Joneses-assessed ‘Quality of Living’, and financially-quantified Investment, andConsumption Spends. Households are socially and financially incentivized to maximize their dove-tail scores. The Household-specific dovetail function v() focuses on Sustainability at the micro-level, and incentivizes both investment in, and consumption of Nominally-neglected Green Assets and Products, externality-abating services, as well as Real Culture, Tradition and Art, even Social Co-operation. Pursuit of Bond objectives vestsHouseholds in Sovereign Bonds that catalyzeuntraded HX-held Precinct FV Gold in to socially-pareto, low-risk, DivYld Capital (and Growth Capital) for Precinct Businesses (shared with the Household as a ‘Social Exit Lumpsum’), and in to Precinct Property Hedge that the Precinct Bank could lean on toward Precinct Renovation and Rebuilding activities¹. This, 3-way pareto for Households, Precinct Landlords as well as Businesses, reinforces an over-arching Public-Private, Real-Nominal pareto for the entire society. Such bottom-up, aggregated design empowers each Household to make itsPrivate Interest-alignedinvestment and spending decisions within the incentives and constraints of the House Bond. Concomitantly, it incentivizes Green and Real living, and offers a return not only to Nominally-ignored and dis-incentivized assets, and externality-abatment services, both locally and globally, but also to heritage, tradition, culture (and arts) that are oftenforsaken at the altar of profits by the Nominal paradigm. In this manner, the dual-purposed Household-centered strategy offers a credible mirror to the ZS-engendering Nominal paradigm, that if unchecked, would bring about a unsustainably divisible and inequitable society. By generating Commons Capital, and Dividend Yield Capital on participating Real families, and creating 2-way Growth Capital from Nominal families, and complementing it with ‘CC and OpCy Working Capital’, the design offers the Nominal paradigm a three-way opportunity to obtain a self-correcting,sustainable economic paradigm. The design, by inducing a sustainable expansion of the society with Precinct Status-Follow Families, obtains a stable demand for CC Growth firms entering DivYld paradigm with an assured floor return on Capital. Further, the Capital-generation and subsequent monetization and allocation strategy is compatible with the rationale of an efficient, and low-return CC Dividend Yield sector.There is, however, a risk that participating Households, in privately seeking their Social Exit Lumpsums from Corporates, make publicly short-sighted decisions that run counter to the avowed goal of environmental and social sustainability. Framing objectives correctly, and limiting substitutions across arguments in formulae that give expression to those objectives, is critical to outcomes from the House Bond.

As with any aggregated social construct, Calibration of quantitative expressions poses significant challenges. Though the design has anticipated the same in its multi-variate, Temporal, Precinct-, and Household-discriminating functional approach, and by specifying rules that aggregate from the micro-household to the Precinct,the same must be optimized and simulated extensively prior practical implementation. Should such simulation be precluded due data needs and institutional cooperation, the designcould yet serve a purpose in benchmarking a ‘what if’ society by which to measure the existing and re-orient toward a Nominally-conducive, Real- and Commons-correcting future. The design is an universal and balancing Left complement to the many market-oriented, quantitative, optimizing micro- and macro-Nominal conceptions that drive various business sectors and Nominal markets, and which unbalance the local and global society and the Commons. It has the potential, post academic and public cognizance, review, simulation and implementation, to re-orient the society to a pareto conducive to the exploitation of emerging technologies toward the largest good of Humanity.