Re: Our “Catch-22” Monetary System…There is No Way Out
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The banks will only accept numbers created by the banking system in payment of these debts. They will not accept anything else in payment. You cannot give your production to the banks to pay off this debt.
The problem I have with this line of thinking is that it treats the bank as being external to the economy. But the interest charged by the bank is attributable to real people – shareholders, employees, debt-holders etc. And these people are a part of the economy and will spend the interest within that economy purchasing goods and services. These purchases are therefore equivalent to acceptance of goods and services in lieu of the interest – it comes to the same thing. I.e. the interest is recycled into the economy rather than remaining as some impossible mathematical puzzle.
This is why you need an appreciation of dynamic flows rather than static equations.