If you dig deeper into debt-based currencies you'll find they are literally impossible to pay off. We don't just owe other contries and bond-holders debt, but also to the private federal reserve. At the most simple example starting with no money in circulation, if I create $100 out of thin air and loan it to you at 10% interest - there's still only $100 in circulation, how could you pay me back $110?
RE: Can Trump Salvage The Sinking US Ship?
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Can Trump Salvage The Sinking US Ship?
Aside from your use of the term "debt based currencies" which is a meaningless tautology, I understand this completely. Im not saying "dont worry, before long well have this debt paid off". Im saying "don't worry, there is nothing wrong with carrying a lot of debt, so long as that debt isnt expanding very much faster than GDP"
A big part of your problem is that youre assuming a dollar is the same as a dollar bill. Its not. A dollar, like a bitcoin, is an entry in an electronic ledger.
The answer to your question is that you're starting from a false premise. If you loan me $100 at 10% interest, you haven't created $100 out of thin air. You've created $110 out of thin air. Currnecy is debt. his ledger shows a $110 recievable asset. yours shows a 110 debt. The universe works.
Here's the tricky part -- unless he can take that $100 and use it to make something worth 110 or more, youre little two person economic system is fucked.
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Interesting explanation, I was just commenting on your one statement that the US can pay its debt is all - I still don't know how that's true, especially if interest payments are as large or larger than the income.
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I expressed that poorly. What i should have said is "the us can make payments on its debt obligations according to terms". Which is to say, we're able to make our payments on time. I wasn't thinking we could actually pay the debt off. Its kind of the same difference as me saying "I can pay my mortgage" versus "i can pay my mortgage off".. i only meant to imply the first.
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Ah OK, I misunderstood. BTW, not to get off topic, so far in my short time here I've had a few good discussions, this being one of them, and am very glad I signed up and started browsing. Nice to have a discussion and even be corrected in an intelligent and articulate manner. I've been so used to responses to what started out as a mere discussion on a political or economic topic that end with plain disregard for any semblance of discourse for so long on pretty much every other platform - nice change to find some intellectually honest people.
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