Quote:
Originally Posted by Bownesian
As for waving a wand and abolishing government and personal debt, I have yet to hear a proposal for how anything would get done without access to capital. I could not afford my house when I bought it so I borrowed capital, paying a price to do so. Government revenues are hugely variable from year to year and thus they need access to capital to operate in lean years, lest they create worse inefficiencies by slashing spending when incomes aren't good.
If banks (and through them shareholders) don't have something to gain by lending capital then none will be lent.
I'm keen to hear how you think that economies would operate without compound interest.
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I think the issue is that under capitalism, someone first needs to accumulate capital (savings) so someone else can borrow it (credit).
In the giant mess we have today, no one is actually saving (I've read somewhere that savings of the american middle class is at all-time-low) and banks are creating money out of thin air to create "much needed liquidity."
It's a house of cards.
As for this summit, apparently the US and China want to spend spend spend their way out of the trouble whereas Europeans have some sense left in them and propose cuts in spending.