Re: For or Against Usury
The people cannot get out of debt due to our tax code, which basically forces people to go into more debt (credit card and so on), Plus I don’t understand how putting some extra principal would help get ride of P+I when it’s only P in existence, true it may put a dent in the P+I, but it will not end it on a collective scale. Maybe I’m getting things mixed up.
Ron Paul never said specifically debt-free currencies, he just mentioned competing currencies. Sorry about that misunderstanding.
Our tax code does not create nor destroy any money, it mearly takes it from one party and transfers it to another. It does not force people to get credit cards or more personal debt, but it can leave them with less credit.
Plus I don’t understand how putting some extra principal would help get ride of P+I when it’s only P in existence
Here is where things get so simple it’s almost tough to understand. Currently “…the actual creation of money always involves an extention of credit by a private commercial bank” Russel L. Munk U.S. Treasury.
What Mr Munk is saying is that there is no money until somebody (government, business, or individual) goes to a bank and goes into debt. All ‘money’ is created as a debt but not all debt is money. This is a fact because as soon as time and interest kick in on the borrowed money (the only kind we can get) the debt will grow, but the money supply will not. The key concept is that when the Principle part of that loan is paid back, it is extinguished and written off the books. This is the exact reason why we have a 59 trillion dollar interest bearing debt and a 7.7 trillion dollar money supply. It’s true that individually we can get out of debt but collectively we cannot because IF you can capture back all that you borrowed plus some enough of someone else’s borrowed principle you can get out of debt, but only by shifting your interest load onto them.
“Money is created when loans are issued and debts incurred; money is extinguished when loans are repaid.”
“Some exsisting money in circulation must be acquired by the borrower to repay the capital of the loan; when that is returned to the bank it is withdrawn from circulation.”
John B. Henderson Senior Specialist in Price Economics – Congressional Research Service.