Courtesy: NY Times
By PAUL KRUGMAN
In 2011, as in 2010, America was in a technical recovery but continued to suffer from disastrously high unemployment. And through most of 2011, as in 2010, almost all the conversation in Washington was about something else: the allegedly urgent issue of reducing the budget deficit.
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This is, however, a really bad analogy in at least two ways.
First, families have to pay back their debt. Governments don’t — all they need to do is ensure that debt grows more slowly than their tax base. The debt from World War II was never repaid; it just became increasingly irrelevant as the U.S. economy grew, and with it the income subject to taxation.
Second — and this is the point almost nobody seems to get — an over-borrowed family owes money to someone else; U.S. debt is, to a large extent, money we owe to ourselves
In order for a total global revolution, we need to discard interest in all forms so that debt cannot be utilized as a tool for economic slavery.
Categories: Economics, Employment, United States
Right. No one understands debt. Not even (or specialy not?) the politicians who are suppose to solve problems…
General citizens of a country will need to solve the problem by boycotting interest and lending instituion and seeking alternatives.
It must also be realized that all new currency that is created is created as debt. Therefore the money supply must grow to create currency to pay interest. The only way the money supply can grow is that someone must borrow it. So debt must always increase. The easiest way to create a sound economy is for a government to create currency and place that currency into the economy not as a loan, not as debt and with no interest burden. This is the responsility of all governments but they have abdicated this responsibility to the private banking cartel which is only interested in creating debt. Sooner or later the system will crash as it is currently crashing in Europe. North America will be next.