Posted: Feb 21, 2014 6:57 pm
I think I get it, so I'll go ahead and state it this way: when you deposit money in a bank, you are a creditor. The bank is a debtor; it owes you the amount you deposited. Normally, the Bank should fill out its balance sheet to reflect this, and your deposit should go down as a liability. But instead, the bank puts the deposit down as an asset.
I haven't been convinced this is a bad thing, but I can't pretend I really understand it. The Money as debt film says the problem is this: most of the money in circulation is bank loans. Bank loans are paid with interest. Therefore the economy is required to grow or there will inevitably defaults and foreclosures. I'm not sure if that's a problem in practice, but I think the video was also trying to tie the desire for perpetual growth with the realities of finite resources, and saying we were going to fuck ourselves over that way.
It does strike me as weird that 0% growth, which would intuitively mean stability, should be such a bad thing for our economy. Maybe this is the reason.
I haven't been convinced this is a bad thing, but I can't pretend I really understand it. The Money as debt film says the problem is this: most of the money in circulation is bank loans. Bank loans are paid with interest. Therefore the economy is required to grow or there will inevitably defaults and foreclosures. I'm not sure if that's a problem in practice, but I think the video was also trying to tie the desire for perpetual growth with the realities of finite resources, and saying we were going to fuck ourselves over that way.
It does strike me as weird that 0% growth, which would intuitively mean stability, should be such a bad thing for our economy. Maybe this is the reason.