If you like debt, you'll love money creation. This subject is not taught in schools (yet). We're supposed to think that there's so much debt because our governments lack discipline. However...
...money is debt.
Banks create money when we borrow, use our credit cards, etc. This is the only way money is created and brought into circulation in the real economy.
...for every dollar
there's one dollar of debt (euro, pound, etc.)
...to get more money flowing,
we need more debt. That's today's system. The best we can do in a recession today, is to court the banks, hoping they'll lend more. But that was the problem to start with. Change the system!
...less debt means: less money!
If we try to pay off debt, the money disappears. In the life of Jane Normal, when she's paid off a debt, she can rejoice in having more money. But for the economy as whole, this means less money. Repaying a loan is the opposite of money creation. The destruction of money.
Positive Money, Debt
From our blog:
Is the debt-crisis over? – No.
How to destroy money
Fun: Enter the Ostrich!
by Michael K for Banks need Boundaries!
- Quantitative Easing and buying own government debt are ways in which we try to do this – but fail! For one simple reason: none of this matters to the daily business of real people. It can in fact even be said that it harms the real economy: stocks and other financial products shoot up in value (because that's the only place the recipients know how to invest it), leaving common savings accounts behind. It's classic more-of-same, German: Verschlimmbesserung. The road to hell is paved with good intentions.
- The word "repay" is misleading. German is better: Tilgung.