Re: Fatal Flaw in Logic of the Crash Course?
There most certainly is a fatal flaw in the crash course. While it is true that the economy grows exponentially, the driving force is not the banking system. Banks are, of course, a central ingredient, since banks can create new money, but what must be understood is what creates the demand for new money.
If all economic agents spent everything they earned, there would be no pressure for increasing the total debt. What drives the expansion is that not everyone do spend everything they earn, instead they accumulate by saving or investing parts of their surplus. Savings are reinjected into the economy as loans, but at the same time increase the flow of money to the accumulator. Investments are similar. Money that are invested in a factory, for instance, are returned to the economy, but at the same time the investor can collect the surplus value the workers at the factory create, which again increases accumulation. "Accumulate, accumulate! That is Moses and the prophets!"
It does not matter whether capitalists get to our money by collecting interests or surplus value, the real problem is that our political and economic system allows and encourages them to hoard.