Skip to main content

View Diary: Forget abolishing the debt ceiling - Abolish the debt (61 comments)

Comment Preferences

  •  You are on the verge on catching on, (1+ / 0-)
    Recommended by:
    psyched

    but you have a ways to go.  A debt created by a bank is is money creation, my friend.  When you take out a loan at your local bank, they and the powerful financial cartel behind them want you to believe that you are borrowing one of their deposits, like Aunt Ethel's account or the deposit made your neighbor down the street.  Untrue.  Aunt Ethel's money, your neighbor's, and everyone else's are demand deposits, withdrawable at any time.  These deposits are untouched by your new loan, which is brand new money which the Fed allowed your bank to create.  And, crucially, the brand new money is really yours - you promised to pay them with your business or labor.  Slick trick, eh?

    •  Money ≠ Wealth. (3+ / 0-)
      Recommended by:
      roundhead, S F Hippie, Neuroptimalian
      A debt created by a bank is is money creation, my friend.
      That debt may be money creation, but it's not wealth creation. Money is a proxy for labor or goods, nothing more—and if a bank creates more nominal money without increasing the labor or goods (or proxies therefor) represented by the whole of its monetary supply, then each individual piece of nominal money has less real value.

      "When I give food to the poor, they call me a saint. When I ask why the poor have no food, they call me a communist." --Dom Helder Camara, archbishop of Recife

      by JamesGG on Fri Jan 18, 2013 at 01:18:02 PM PST

      [ Parent ]

Subscribe or Donate to support Daily Kos.

Click here for the mobile view of the site