Beyond the Bailout: Convert to Debt-Free Money |
Tuesday Dec 23 2008
By David Korten | Website
Read the previous post in this series.
This brings us to the most important reform of all: changing the way we create money. One key to Wall Street’s power and to the inherent instability of the financial system is the current practice of private banks creating money with a simple bookkeeping entry each time they make a loan. Because the bookkeeping entry creates only the principal, but not the interest, unless the economy grows fast enough to generate sufficient demand for loans to create the new money required to make the interest payments on the previous loans, debts go into default and the financial system and the economy collapse. The demand for repayment
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Written by eldering at The Great Turning
Tagged with: debt-free_money main_street wall_street
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