[quote=arraya]And therein lies the problem with leverage…it relies on ever-expanding leverage and debt.
Our monetary system is based on debt and compound interest, which results in an ever expanding amount of “money” chasing dwindling natural resources on our finite planet.
To put another way: All money is born of debt and all interest on debt has yet to be created and is preferably created out of more debt. Got it, infinite debt has to be possible for it to work out. Faith-based economics.
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That first quote looked suspiciously canned, and indeed it can be found verbatim on many “green” websites on the internet, including this one: http://www.grassrootsnetroots.org/articles/article_15155.cfm. Next time, do the authors a favor and use quotes. Or better yet, state a position using your own words, if possible. But, to your point, have you noticed that as time and technology progress that humans have managed to become increasingly more efficient in their use of the “dwindling natural resources on our finite planet,” thus allowing both populations and standards of living to grow at the same time? Basically, Malthus called and he wants his theory back.
The “All money is born of debt…” bit comes almost verbatim from Paul Grignon’s “Money as Debt” animated piece, which I imagine many Piggs have watched at some point or other. Again, quotations would be in order.
But, again, to the point you’re trying to make, let’s use a quick micro example to show that debt, in fact, can be paid down without one’s micro economy collapsing. People who are in debt regularly cut back on spending and/or earn more money in order to pay down debt. Happens all the time. Their lives don’t necessarily require ever-expanding debts to keep their micro economy, as it were, expanding. And if the debts do expand, more often than not (the last few years excepted, of course), the expanding debt is accompanied by expanding earnings. There’s nothing wrong with debt expansion, per se, so long as it’s accompanied by an equal degree of earnings expansion.
We, as a nation, can pay down debt relative to GDP and still have GDP expand. But because our debt levels are so great relative to GDP (because we’ve been irresponsible with debt for the last 20 years), GDP will expand at a much lower rate (via lower consumption) than it has in the past as we pay down that debt. It’s simple economics. But we cannot pay down the debt all at once. It will take some time.
On a general note, when folks just use other peoples’ quotes verbatim (and don’t acknowledge them as such) to make their points I sometimes wonder whether they really believe what they’re quoting or whether they just think it “sounds good.” I suspect that many folks feel the same way. I don’t know where you stand, specifically.
