Appendix A: LEDDA Concepts and Currency FlowsThis appendix provides an overview of selected LEDDA concepts and a brief description of currency flows. Details are provided in Economic Direct Democracy.Principled Societies ProjectPSP_fb04c9f2-1f22-11e2-99ec-48163736e24cJohn C. BoikOrganizationsFor this discussion, the term organization comprises all local for-profit businesses and nonprofit organizations that become members.For-Profit BusinessesPrincipled BusinessesFor-profit businesses are comprised of Principled Businesses and standard businesses. The former is a cross between for-profit and nonprofit models, unique to the LEDDA framework. Principled Businesses must meet a set of criteria (discussed in Chapter 7 of Economic Direct Democracy), and are certified as such by the membership. Given that a Principled Business does not provide investors with financial returns, a public corporation cannot be a Principled Business.Standard BusinessesA standard business is a business that is not a Principled Business. Thus, standard businesses could be privately or publicly held, and could even be a cooperative that is not certified as a Principled Business.Nonprofit OrganizationsNonprofits are any organization that (in the United States) are tax exempt under IRS rules. Thus, nonprofits could include schools, hospitals, media outlets, local government agencies, and public service agencies.SchoolsHospitalsMedia OutletsLocal Government AgenciesPublic Service AgenciesMember incomes rise through a virtuous cycle... Each year, the virtuous cycle repeats and grows in magnitude._bfc7aefa-559d-11e4-9551-99ef66263f6eTo provide an overview of selected LEDDA concepts and a brief description of currency flows._bfc7b062-559d-11e4-9551-99ef66263f6eIncome GainsPay people to participate._bfc7b15c-559d-11e4-9551-99ef66263f6e1FamiliesEvery family that joins sees a direct pretax, take-home income gain over baseline (barring job switches or job losses). One can roughly say that a LEDDA pays people to participate... The money for income gains comes from increased volume of the local money supply, which expands for two reasons.Local CurrencyIssue local electronic currency._bfc7b1de-559d-11e4-9551-99ef66263f6e1.1First, a LEDDA issues a local electronic currency, called the token, in a debt-free fiat process.National CurrencyKeep national currency circulating longer in the local economy._bfc7b26a-559d-11e4-9551-99ef66263f6e1.2LEDDA MembersMembers are encouraged to purchase from local wholesalers and retailers, especially those who themselves purchase from local supply chains. This serves to keep national currency circulating longer in the local economy. Local WholesalersLocal RetailersSecond, the flow of national currency into and out of a local region is altered via a buy local campaign... Transparency within the LEDDA framework informs members about currency flows, as well as flows of resources and wastes.Additional Money[Provide] additional sources of money._bfc7b2ec-559d-11e4-9551-99ef66263f6e1.3Additional sources of money are possible.Bank LendingIncrease in bank lending within a local economy._bfc7b378-559d-11e4-9551-99ef66263f6e1.3.1For example, an increase in bank lending within a local economy would increase the local money supply.Grants[Seek] government grants._bfc7b404-559d-11e4-9551-99ef66263f6e1.3.2Also, government grants could increase the local money supply.Member IncomesRaise member incomes._bfc7b49a-559d-11e4-9551-99ef66263f6e1.4LEDDA MembersMember incomes rise through a virtuous cycle, which in its simplest form is as follows:Local Money SupplyGrow the local money supply grows through the buy local and local currency programs._bfc7b51c-559d-11e4-9551-99ef66263f6e1.4.1Wage IncreasesOrganizations share some of their gains with employees in the form of wage increases._bfc7b59e-559d-11e4-9551-99ef66263f6e1.4.2LEDDA OrganizationsCrowd-Based FundingEmployees share some of their gains with the LEDDA financial system, called the Crowd-Based Financial System (CBFS)._bfc7b666-559d-11e4-9551-99ef66263f6e1.4.3Employees of LEDDA OrganizationsJobsThe CBFS funds new jobs._bfc7b6e8-559d-11e4-9551-99ef66263f6e1.4.4Each year, the virtuous cycle repeats and grows in magnitude.Crowd-Based Financial SystemOffer zero-cost financing to member organizations._bfc7b774-559d-11e4-9551-99ef66263f6e2LEDDA Member OrganizationsLEDDA MembersEvery member must contribute a specific amount of income to the CBFS. Contributions are made in both national currency and tokens. Despite the required contributions, every family sees a net income gain over baseline. This refers to postCBFS income -- pretax, take-home income after CBFS contributions have been made. PreCBFS income refers to income prior to CBFS contributions. True to the crowdfunding model, members have wide discretion in choosing how their CBFS contributions are used. For example, a member can choose to fund one business over another, or one nonprofit over another.The CBFS is a novel form of mandatory, profit-neutral crowdfunding and participatory budgeting that offers zero-cost financing to member organizations that apply for funding. For-Profit OrganizationsProvide subsidies and interest-free loans to for-profit organizations._bfc7b80a-559d-11e4-9551-99ef66263f6e2.1For-Profit OrganizationsThe CBFS provides subsidies and interest-free loans to for-profit organizations, and donations and interest-free loans nonprofits.NonprofitsProvide donations and interest-free loans nonprofits._bfc7b896-559d-11e4-9551-99ef66263f6e2.2NonprofitsIncome AssistanceProvide income assistance (called nurture engagements) to members who are unemployed or not in the workforce (NIWF)._bfc7b922-559d-11e4-9551-99ef66263f6e2.3Unemployed LEDDA MembersOperating FundsProvides funds for operating the LEDDA itself._bfc7b9c2-559d-11e4-9551-99ef66263f6e2.42014-10-16http://www.principledsocietiesproject.org/?wpdmact=process&did=NC5ob3RsaW5rOwenAmburOwen.Ambur@verizon.net