'Assuming Money'

a must read for a deeper understanding of "money".........from oped news........

"Banks create money as loan principal, but they create repayment obligations ("debt") as principal + interest.   The loan principal that is spent into the economy by borrowers becomes the economy's "money supply".   So loan principal = money supply, and money supply <   debt.   Our system systematically generates more debt than it creates money to pay that debt.   This is a STUPID money system.

Our privately owned system of issuing all the economy's money as debt at interest is a pure Ponzi, because it requires the constant addition of new borrowers spending additional new money to keep up the appearance that this system 'works'. Simple arithmetic shows it CANNOT work, and the fact that our money system is arithmetically defective explains the current global debt crisis, as proponents of modern money theory (MMT) never tire of showing all whose ears are open to listen and whose eyes are open to see.

Our profit seeking economic system systematically generates more prices than it generates incomes to pay those prices.   Our bank-debt money system systematically generates more debt than it creates money to pay that debt.   We all need to "profit" so it is error to try to alter that fact of reality by various 'socialist' anti-profit schemes.   We must accommodate our economic reality by modifying our money system so that it becomes positive sum like our economic system.   Somebody needs to add non-debt money into the spending-cum-income equation, so that income earners have enough money to buy all the economy's outputs at prices that are profitable to producers.

Clearly, the bankers in our private for-profit money system are not going to start giving money to people.   Bankers are in the business of "lending" money at interest, for the sake of getting back more money than they put out.   Only a government with the power to create debt-free money is able to perform the financially necessary function of adding non-debt money to make our money system positive sum.

As Jamie Galbraith explains in his 2008 book, "The Predator State", the Chinese are doing this in a clever way that seems to be working.   Unlike virtually the entire hopeless world whose nations have surrendered their monetary sovereignty to the private bankers, the Chinese government has retained ownership of its money and banking system.   The government tells the banks to lend to producers, and the producers use the money to hire workers and produce stuff.   This puts incomes into the hands of the workers and the entrepreneurs, who then have money to buy stuff.   But like us, they can't buy "all" the stuff at profitable prices, so excess stuff is hauled to discounters who sell it to happy Chinese consumers at a fraction of its cost price"..............READ MORE