And now, for the first amusing video

The following video is an amusing and enlightening look at what money is. If you don’t understand how money is created and what it represents, you can’t really understand economics or capitalism.

That’s the first part; you can link in YouTube to the other parts, or you can see the full version here.

There’s a problem with an economy that uses money that is all created as debt. The only way money can be created is if someone takes a loan from the bank. There is now money, an obligation to repay the debt, and interest. Obviously to repay the debt and interest, a person has to get more money than the original amount. That extra money must come from another loan, with more interest. No matter how much money exists in the economy, the only way to repay all the debt is with even more debt. The banks making the loans will always end up with an increasing share of the money in the economy from all the interest, until eventually they will have nearly ALL the money in the economy. At this point everyone else defaults on their loans, the banks with all the money buy all the real assets (real estate, intellectual property, commodities) at basically any price they want (because no one is going to outbid them), and they now own everything, and no one else owns anything.

Questions to consider: do you think the bankers realize this? When you think of the financial crisis, the bailouts, home foreclosures, unemployment, and how fantastically wealthy bankers and their government cronies are, isn’t this exactly what’s going on right now?

About American Socialist

History major turned engineer
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