Debt, grinding debt, whose iron face the widow, the orphan, and the sons of genius fear and hate: – debt, which consumes so much time, which cripples and disheartens a great spirit with cares that seem so base, is a preceptor whose lessons cannot be forgotten.
With these words of the great American writer Emerson starts the article in Huffington Post, 23rd Sept 2012.
Here is a short extract:
The way to eliminate the deficit is to eliminate the dumbest idea anyone ever had for financing government excess expenditure – government bonds.
I am the government and I write an IOU with a promise to pay interest. You are a bank so you create the money and buy my IOU. Duhh! But I am the government so I could have created the money myself and had no debt and no interest to pay.
The origin of the bonds system lies when currencies were backed by gold. But it is a nonsense with a fiat currency such as any modern currency..
For decades house prices have been too high due to the fact that the banks have created more and more money and people are forced to borrow it to buy houses. If the banks had not created the debt in the first place house prices would be lower – much lower. This is a classic Ponzi scheme where the values of the scheme depend, not on fundamentals, but on new entrants to the scheme or existing entrants increasing they stake.
Read the whole article: Debt, Grinding Debt