90 year old woman shoots herself as she is being foreclosed on!

[max]

Sing it with me folks....

And I'm proud to be an America, where at least I know I'm free


http://www.cnn.com/2008/US/10/03/eviction.suicide.attempt/index.html

[Kludge]

Planning ahead FTW.

[Oyate]

So Addie Polk was born around 1917.

She was a toddler as WWI was wrapping up. She grew up with veteran men home from war. Horses were the main method of conveyance, likely.

She was 13 years old in the Great Depression.

She was 23 when WWII broke out, a young lady.

She saw the post-war boom, Viet Nam, everything. Lived through all of it.

Now she don't want to live.

[kahless]

I bet her property taxes were higher than the mortgage payment thus the reason why she could not pay it off. Property taxation amounts to government sponsored slavery

[DFF]

Where the fuck was Paulson???

[Vote Waterman 2028]

"Then she kind of moved toward me a little and I saw that blood, and I said, 'Oh, no. Miss Polk musta done shot herself,' " Dillon said.

you think they would at least fix the grammar when quoting people.. I feel horrible now after i laughed at that. :( Sad story.

[Goldwater64]

Not to sound cold hearted, it's certainly a sad story, but what are you suggesting should have happened instead? She didn't live up to her end, so the bank came for the house. It would be a real problem if the government tried to stop the bank from taking the house because the public "felt bad" for the women.

[max]

what are you suggesting should have happened instead? She didn't live up to her end, so the bank came for the house. .

When you have a debt based money system, the total debt in the economy must always EXCEED the total currency in circulation....

It's like a game of monetary musical chairs....THEREFORE...there MUST ALWAYS be people who "do not live up their end."

The whole system is criminal so yes, she is a victim. What I'm suggesting is the total abolition of the debt money supply system. Thats what MANDATES foreclosures for a given percentage of people.

[Goldwater64]

When you have a debt based money system, the total debt in the economy must always EXCEED the total currency in circulation....

It's like a game of monetary musical chairs....THEREFORE...there MUST ALWAYS be people who "do not live up their end."

The whole system is criminal so yes, she is a victim. What I'm suggesting is the total abolition of the debt money supply system. Thats what MANDATES foreclosures for a given percentage of people.

Hmm. I really tried to follow you here, but I can't get past this: It sounds like she needed money. She made a choice to stay in that house and not sell it and save the money from the sell and live somewhere cheaper. It turns out that she couldn't afford the loan she took out with house as collateral. She took out a loan that she wasn't sure she could afford. It's a risk she took and the risk didn't pay out. If we try to rig the system so that every risk pays out...then we all loose.

Individuals can make bad decisions in any financial system. People still got foreclosed on before the debt based monetary system.

EDIT: When I say "bad decisions" I dont mean it in a moralistic way, just a practical one. Perhaps irrational is a better term than "bad."

[max]

Hmm. I really tried to follow you here, but I can't get past this: It sounds like she needed money. She made a choice to stay in that house and not sell it and save the money from the sell and live somewhere cheaper. It turns out that she couldn't afford the loan she took out with house as collateral. She took out a loan that she wasn't sure she could afford. It's a risk she took and the risk didn't pay out. If we try to rig the system so that every risk pays out...then we all loose.

Individuals can make bad decisions in any financial system. People still got foreclosed on before the debt based monetary system.

u'r missing the big picture

[Spider-Man]

She shot herself in the chest twice.

That old lady is hardcore.

[Mini-Me]

When you have a debt based money system, the total debt in the economy must always EXCEED the total currency in circulation....

It's like a game of monetary musical chairs....THEREFORE...there MUST ALWAYS be people who "do not live up their end."

The whole system is criminal so yes, she is a victim. What I'm suggesting is the total abolition of the debt money supply system. Thats what MANDATES foreclosures for a given percentage of people.

Why would the total debt exceed the total currency in circulation? It EQUALS the total currency in circulation. Remember that interest paid to banks circulates again through the economy just like profits from other companies do.

This isn't a defense of debt-based money, by the way...I'm just saying that debt doesn't really exceed currency in circulation.


She shot herself in the chest twice.

That old lady is hardcore.

No kidding, man...she wasn't playing around!

[angelatc]

So Addie Polk was born around 1917.

She was a toddler as WWI was wrapping up. She grew up with veteran men home from war. Horses were the main method of conveyance, likely.

She was 13 years old in the Great Depression.

She was 23 when WWII broke out, a young lady.

She saw the post-war boom, Viet Nam, everything. Lived through all of it.

Now she don't want to live.

You'd think that after 70 years her mortgage would be paid off.

[max]

Why would the total debt exceed the total currency in circulation? It EQUALS the total currency in circulation. Remember that interest paid to banks circulates again through the economy just like profits from other companies do.
This isn't a defense of debt-based money, by the way...I'm just saying that debt doesn't really exceed currency in circulation.




yes.....but that interest collected has to be LOANED OUT AGAIN AT INTEREST....

All new money injected into the system is done in the form of debt....principal + interest ALWAYS exceeds total principal

google "money as debt" great video

[Mini-Me]

yes.....but that interest collected has to be LOANED OUT AGAIN AT INTEREST....

All new money injected into the system is done in the form of debt....principal + interest ALWAYS exceeds total principal

google "money as debt" great video

No, it doesn't HAVE to be loaned out again, and that's the central fallacy of your argument. Part of it is paid to employees, part of it is paid as dividends to stockholders, and part is indeed reinvested into the company and put in reserves (like deposits are), then loaned out again at interest. However, until they loan a portion of it out again, them keeping that portion is really no different from any other company reinvesting their pockets (or you keeping money in your pocket for a bit before spending it). Once they DO loan it out again, well - the person they loaned it to now has the cash for the moment.

I understand how money is created as debt, and the Federal Reserve is at the center of this, loaning money created from thin air rather than from actual reserves...which is precisely why it's created from debt, rather than value (and that's why the system is so utterly fraudulent). Actually, I myself used to have the same misconception you have. I made a huge long post back in the day about the "never-ending, constantly growing debt monster that must keep getting bigger and bigger because interest makes it a never-ending catch-up game for the whole population." Actually, I think it was AceNZ that set me straight on this way back...but as bad as the situation is, the "musical chairs game" doesn't really work like that, or at least that would only occur for some of the last loans to be paid back once most of the credit has been extinguished and massive money supply deflation has occurred (which obviously isn't happening in our situation).

[max]

No, it doesn't have to - it is paid to employees, paid as dividends to stockholders, AND reinvested into the company and loaned out again at interest. However, until they loan a portion of it out again, them keeping that portion is really no different from anyone else keeping money in their pocket. Once they DO loan it out again, well - the person they loaned it to now has the cash for the moment.

do the math....

1. add up the total of all government debt...state debt...local debt...corporate debt...small business loan debt....mortgage debt...car debt...student debt...credt card debt....

2. add up the total of all money (reserach m1)...deposits, checking accounts, paper cash etc...

u tell me which higher???

if 1 is greater 2......how can debt ever be paid????? this fucked system systems is monetary musical chairs with perpetual profit for the bankers

[Mini-Me]

do the math....

1. add up the total of all government debt...state debt...local debt...corporate debt...small business loan debt....mortgage debt...car debt...student debt...credt card debt....

2. add up the total of all money (reserach m1)...deposits, checking accounts, paper cash etc...

u tell me which higher???

if 1 is greater 2......how can debt ever be paid????? this fucked system systems is monetary musical chairs with perpetual profit for the bankers

The reason the debt can be theoretically paid is because not everybody pays all at once. You're forgetting that the loan money someone gets is paid to various other people, and they can use that to pay off part of their own loan. This constant circulation of money is what allows everyone's loans to be paid for, interest and all. The key thing to remember is that when interest is paid back, it does not just disappear - it recirculates again throughout the economy, and people can receive it through various exchanges. The money isn't all just poured into bank reserves, because a lot goes to bank employee wages and bank shareholder dividends - and theoretically, a bank could sell their reserves for whale skin if they wanted to, though they're much more likely to use them for loaning more money.

A good way to look at it is this: The first borrower needs to eventually get ahold of part of the second borrower's loan to pay his interest (after the second borrower spent their loan money and that money circulated throughout the economy, eventually reaching the first borrower). However, theoretically, if the bank repeatedly spends the money it earns on interest over and over, every single subsequent debtor could get ahold of those same exact dollars the previous debtor used to pay their interest (through wages, exchanges, or whatever in the market) and use them to pay for THEIR interest as well...except for the last borrower, who will fall short on the interest (which I'll get to here).

Now, if ALL LOANS STOPPED and everybody started paying off their loans with only the money still in existence, this is what would happen:
Most people would be able to pay principal and interest. Every single remaining person except for one would also be able to pay principal and interest, if not for the fact that the money supply has diminished so much that it will be hard for them to find the people with the last remnants of cash: Some might be stuffed under a guy's mattress, and some more might be stuck in a bank's reserves. Once every loan has been paid off but one, there will only be enough money in existence for the VERY LAST person to pay principal, and not interest - and only if he can track down every redneck with money under his mattress and any bank with remaining money in reserves that they collected on interest, etc., and then perform some kind of service or exchange for those last remaining dollars. In practice, this is nigh-impossible, but the point is this: As long as everybody doesn't pay all at once, interest payments will theoretically circulate again throughout the economy in such a way that everybody can pay off principal and interest except the last person, who will only be able to pay off principal...so I suppose that yes, one person is doomed to default on their loan (to a degree), no matter how perfectly the money supply circulates.

In reality, it would be extremely hard to actually organize this "perfect return of the money supply" anyway, and only an act of God could do it (because I'm sure someone dropped a dollar bill in a sewer, etc.). However, it's theoretically possible, and the only person defaulting on interest would be the last person. In practice, since it would be very hard for remaining debtors to find remaining money once the money supply became very low, this game would indeed be extremely likely (but not inevitable) to devolve into musical chairs if no new loans were made and 90% or so of the money has already been extinguished (i.e. the remaining chairs are hidden in hard-to-find places)...
Now, remember that I'm not using any of this to justify our system. Our system is not just. I'm merely pointing out that the only time our system actually devolves into musical chairs is at the very tail end of 100% deflation, and theoretically, the only absolutely inevitable "missing bit" is the very last debtor's interest.

BIG EDIT: By the way, I should address the "perpetual profit for the bankers" thing: Remember that only the Federal Reserve actually creates credit out of thin air and earns interest on it (though it does refund most interest paid by the Treasury, it doesn't refund interest paid by other banks) - they're privileged goons, and they have indeed been legislated into a position of perpetual profits. However, commercial banks loan money that they borrow themselves, either from the Fed or from depositers. There are currently a lot of stupid laws and regulations that unfairly benefit banks, but commercial banks working on a fractional reserve system are not exclusive to a system where money is created as debt. They would still exist even in a free market with competing commodity currency! The fractional reserve banking process doesn't usually create money out of thin air the way the Fed does - banks loan out money they have in reserves, and the fractional reserve banking "money multiplier" effect should be more accurately termed an "IOU" multiplier effect. The confusion here stems from the fact that we consider bank deposits to be "our money," when they're really not - they're IOU's for real M0 money, which are payable on demand in the best case scenario, but which we receive interest on of our own in order to mitigate the inherent risk of depositing (lending) in the first place. The banks have a 10% reserve requirement by law (whereas under a free market, this would not be legislated but determined by what number is actually most responsible for on-demand deposits). This means that essentially, for every dollar in reserve, 10 creditors (depositers) think they hold claim to it, though there's only enough in there at the moment for one to take it out. Of course, if the bank doesn't loan any more money back out, they'll go back to 100% reserves once everyone pays back their loan, assuming nobody defaults - and the risk of them not paying back is why they charge interest. In any case, this same exact process would happen in a free market (though current regulations kind of make the money multiplier effect and credit creation/extinguishing a little more explicit than implicit, the end result is the same).

[Goldwater64]

do the math....

1. add up the total of all government debt...state debt...local debt...corporate debt...small business loan debt....mortgage debt...car debt...student debt...credt card debt....

2. add up the total of all money (reserach m1)...deposits, checking accounts, paper cash etc...

u tell me which higher???

if 1 is greater 2......how can debt ever be paid????? this fucked system systems is monetary musical chairs with perpetual profit for the bankers

You're basically right about that.

But, to say "perpetual profit for bankers" is a bit onesided: people who aren't bankers (ie senior citizens who just had to take a 45k loan on their house) are taking out those loans and enjoying the benefits of this credit out of nowhere. They are living it up on this baseless credit, they are living a life style they couldn't afford in an honest system.

[RickyJ]

Damn! People this just sucks. I would have helped her out if I knew about this before hand. America is going down the tubes at a much faster rate now. A revolution would be better than seeing more of this shit.

[Micah Dardar]

Damn! People this just sucks. I would have helped her out if I knew about this before hand. America is going down the tubes at a much faster rate now. A revolution would be better than seeing more of this shit.

Exactly. If we got rid of the government bull and had an organized charity, we would hear less about things like this. None of us want to see our seniors suffer, but the government isn't doing a good job of taking care of them.

[Jodi]

In 2004, Polk took out a 30-year, 6.375 percent mortgage for $45,620 with a Countrywide Home Loan office in Cuyahoga Falls, Ohio. The same day, she also took out an $11,380 line of credit.

Now why would an 86 year old woman take out a 30 year mortgage?????

[cheapseats]

She shot herself in the chest twice.

That old lady is hardcore.

Yes, well.

She is being treated in an Akron hospital, and Fannie Mae has agreed to forgive her balance and give her her house outright.

So, there ya go...problem, solution.

As ever, I am on record as a peaceable and non-violent person but, nuthin' for nuthin', I'm pretty sure it isn't homeowners who should be getting shot.

[dannno]

Why would the total debt exceed the total currency in circulation? It EQUALS the total currency in circulation. Remember that interest paid to banks circulates again through the economy just like profits from other companies do.

This isn't a defense of debt-based money, by the way...I'm just saying that debt doesn't really exceed currency in circulation.


No, you're wrong.

When I get a loan for 300k, There is 300k inserted into the economy. I then have to pay the bank 300k + interest.. if ALL money is created this way, then WHERE does the interest come from? The banks only create enough money to pay the principal, not the principal plus interest, thus we have foreclosures built into our economic system.

[Mini-Me]

Yes, well.

She is being treated in an Akron hospital, and Fannie Mae has agreed to forgive her balance and give her her house outright.

So, there ya go...problem, solution.

As ever, I am on record as a peaceable and non-violent person but, nuthin' for nuthin', I'm pretty sure it isn't homeowners who should be getting shot.

Considering the money Fannie just flat-out robbed from all of us, I'm not really impressed with their "generosity" in forgiving anyone's balance.

[Anti Federalist]

Mini Me wrote:


The banks have a 10% reserve requirement by law

Just wanted to correct that. The 10 percent regulation was repealed in 1999 if I'm not mistaken.

Banks are free to loan at a 10,000 to one rate if they wanted to.

I suspect this might be one of the reasons for the current meltdown as well.

[dannno]

No, it doesn't HAVE to be loaned out again, and that's the central fallacy of your argument. Part of it is paid to employees, part of it is paid as dividends to stockholders, and part is indeed reinvested into the company and put in reserves (like deposits are), then loaned out again at interest.

Wow, wrong again. I suggest you watch that "Money as Debt" video suggested to you. It is very helpful.


You said, "It doesn't have to be loaned out again", but I am saying it WILL be loaned out again because that is how banks make money.. They collect interest on the loan, and it is the INTEREST that is used to pay the employees, dividends, reinvested, etc.. They don't use their reserves to pay employees, which is what you are inferring..

[ForrestLayne]

Mini Me wrote:



Just wanted to correct that. The 10 percent regulation was repealed in 1999 if I'm not mistaken.

Banks are free to loan at a 10,000 to one rate if they wanted to.

I suspect this might be one of the reasons for the current meltdown as well.

The percent was 9% until today - the bailout bill allows banks to now have 0% reserves - see the bill they passed today - it was not an add-on in was in the first one that was voted down

[cheapseats]

Considering the money Fannie just flat-out robbed from all of us, I'm not really impressed with their "generosity" in forgiving anyone's balance.

I didn't make myself clear.

EXACTLY.

What would they do, have people kill themselves? Have people kill THEM? In the same way that this woman's desperation exposes their heartlessness and obliges them to be socially responsible, if only for appearnace's sake, they would NEVER have let businesses nationwide fail to meet payroll. Someone would have killed some of them, there is no doubt in my mind.

Henry Paulson and several others are Traitors. In my opinion.

I believe capital punishment is a necessary quote-unquote evil...like government and taxation. I believe death by firing squad is the most humane, the most efficient and the most cost effective method of capital punishment. I believe corruption in public office is traitorous. I believe that Traitors should be punished by death, ergo by firing squad.

[RickyJ]

Yes, well.

She is being treated in an Akron hospital, and Fannie Mae has agreed to forgive her balance and give her her house outright.

So, there ya go...problem, solution.

As ever, I am on record as a peaceable and non-violent person but, nuthin' for nuthin', I'm pretty sure it isn't homeowners who should be getting shot.

She is STILL ALIVE! :eek:

She really is tough!

Shoot, we should make her President and call off this farce of an election right now.

[Deborah K]

when you have a debt based money system, the total debt in the economy must always exceed the total currency in circulation....

It's like a game of monetary musical chairs....therefore...there must always be people who "do not live up their end."

the whole system is criminal so yes, she is a victim. What i'm suggesting is the total abolition of the debt money supply system. Thats what mandates foreclosures for a given percentage of people.

+1776

[Mini-Me]

No, you're wrong.

When I get a loan for 300k, There is 300k inserted into the economy. I then have to pay the bank 300k + interest.. if ALL money is created this way, then WHERE does the interest come from? The banks only create enough money to pay the principal, not the principal plus interest, thus we have foreclosures built into our economic system.

I'm actually correct on this point with a small caveat - in a 100% deflation scenario (and only in that scenario), it's impossible for the very last debtor to come up with money for interest, but all previous debtors can, at least in theory (the practical distribution of money throughout the economy during a 100% deflation scenario makes this easier said than done, though). I tried to explain this in detail in a previous post, but I'll try to be more lucid here.

As I mentioned, the key thing most people forget is that when the bank receives interest, it can and does SPEND a good portion of it in the economy without needing to loan it out again (and when it does loan the remainder out again continuously, there will never be a last debtor anyway). On one hand, you're saying the bank will continue lending money, but on the other hand, you're saying the money will "run out" and there won't be enough to pay back. They're mutually exclusive situations. The money will only run out once the bank stops lending money, at which point if it's really done lending, its shareholders are free to use the money it collected on interest for other purposes and they will spend it in the economy anyway...thereby returning the last few dollars into the economy and allowing every single one of the remaining debtors but the very last one to pay off their interest in the unfolding 100% deflation scenario.

To give a simple example of the general cycle using loans all of the same amount: After debtor n+1's money circulates through the economy, there's now enough money for debtor n to pay off his interest (and there was already enough to pay off the principal). This goes on and on until all of the loans stop, and then the very last debtor can still pay off his principal - assuming he can track down and earn back every single dollar he spent from the loan - but he won't be able to pay off his interest. Still, he's the only one this applies to. You can also look at this another way: Because interest paid to the bank is recycled throughout the economy (one way or another), every single debtor (except the last, once again) can technically pay their interest using the same exact dollars the last person used. These examples both assume the simple scenario where every loan is of the same amount - it still works essentially the same way if they're not, but it's a little more complex, and it's harder to illustrate.

I'll give a VERY simplified example now to show this in action. Simplistically speaking, let's look at a one bank, five-person economy. The bank creates credit and loans each person $100 for a total of $500, and the final repayment for each loan including interest is $125. They're not paid back all at once, though (the different debtors pay the bank back at different times - in full, just to make it simple).
Step by step:
The money from each loan circulates around the 5-person economy as Air Nikes, beer, and sex are traded.
Eventually, the first person musters up $125 and pays it back to the bank. $100 is extinguished, and $25 is kept by the bank. This $25 does not disappear, and the bank does not hold it forever. It will spend some on employees (persons 1 and 2 for instance) and dividends for shareholders (persons 2 and 3 for instance). Finally, it will realistically reinvest some into its reserves for future loans, but it does not HAVE to.
Now there's $400 left in circulation in total, $25 of which is held by the bank and $375 of which is held by the remaining people.
Persons 2, 3, 4 pay off their loans in succession, at $125 each. That's $375 total. $300 is extinguished, and the bank keeps $75. (As I mentioned, this is not all at once - there's some time in between where the bank slowly pays out some of this to employees, shareholders, etc.)
Now, all loans have been repaid with interest except for the last person's. There's still $100 in the system - enough for the very last person, person 5, to pay his principal, but not his interest. Some of the $100 left might be owned by persons 1, 2, 3, and 4, and some might be already with person 5. Some might be stuck in reserves at the bank. Let's say $75 is already in circulation among the 5 people, and $25 is in reserves.
Now, if the bank wants to continue loaning money out with its remaining $25 reserves, this is no problem - the cycle just continues, and odds are, it will have already loaned money out on a regular basis and (given "smart" management) kept the amount of money relatively constant over time. However, if it DOESN'T want to loan out money, its shareholders are probably going to close up shop anyway and make use of their business profits by spending them in the market.
In any case, person 5 will have to go about his business as usual, selling goods and services to come up with the $100 that is left. Practically speaking, someone may not part with their money, but theoretically speaking, he can come up with the remaining $100 and pay it. He has now paid off his principal, though he's unable to pay off his interest.

If you kept track of all that, you'd notice that the bank lent out only $500, but it ended up being paid back a total of $600 (but not all at once, since $600 doesn't exist all at once, let alone $625)! All but the last person's $25 interest has been paid back, and this default on the last person's interest only happened because all loans stopped and the money supply was allowed to deflate entirely. It's the circulation of money that allows this. For the exact same reason, in a three-person economy where the total money supply (value-based, not debt-based) is limited to a constant $75, each of them might technically make $400 a year trading with each other - it's just that they keep spending it and consuming the goods.

Bottom line: In theory, the only person who inevitably cannot pay off interest is the very last person to pay their loan in a 100% deflation scenario. When 100% deflation is not going on and the game is continuing, it's theoretically possible for nobody to default whatsoever on principal or interest. When 100% deflation IS going on, it's still theoretically possible for every single person but the last to pay off everything, including interest, and even the last one can still theoretically pay off the principal.

NOTE: I did fudge around a little bit with the type of bank we're dealing with for simplicity purposes, kind of conflating the Fed (money out of thin air) and a regular commercial bank (money from deposits/legit reserves) all into one. Hopefully it was still clear enough, though.

[Mini-Me]

Mini Me wrote:



Just wanted to correct that. The 10 percent regulation was repealed in 1999 if I'm not mistaken.

Banks are free to loan at a 10,000 to one rate if they wanted to.

I suspect this might be one of the reasons for the current meltdown as well.



The percent was 9% until today - the bailout bill allows banks to now have 0% reserves - see the bill they passed today - it was not an add-on in was in the first one that was voted down

Sorry, I'm behind on the times. :D You guys are right. In that case, just pretend the law was 10% and my example of "10 people think they hold claim to each dollar" will still make sense. :p

Anyway, one of the biggest problems with low reserve ratios in our current system is that depositers are hoodwinked by government regulations and assurances that their money is "safe." If we weren't being misled by these false guarantees and we better understood that the money in our bank accounts was merely a bunch of IOU's from the bank to us, we as depositers would realistically demand ridiculous amounts of interest from a bank with a reserve ratio as low as 0.01% or something, since the risk is so absurdly high.


By the way, I have a HUGE correction to make to one of my first posts here, along with an apology:

When you have a debt based money system, the total debt in the economy must always EXCEED the total currency in circulation....

It's like a game of monetary musical chairs....THEREFORE...there MUST ALWAYS be people who "do not live up their end."

The whole system is criminal so yes, she is a victim. What I'm suggesting is the total abolition of the debt money supply system. Thats what MANDATES foreclosures for a given percentage of people.


Why would the total debt exceed the total currency in circulation? It EQUALS the total currency in circulation. Remember that interest paid to banks circulates again through the economy just like profits from other companies do.

This isn't a defense of debt-based money, by the way...I'm just saying that debt doesn't really exceed currency in circulation.


No, you're wrong.

When I get a loan for 300k, There is 300k inserted into the economy. I then have to pay the bank 300k + interest.. if ALL money is created this way, then WHERE does the interest come from? The banks only create enough money to pay the principal, not the principal plus interest, thus we have foreclosures built into our economic system.

CRAP! I just realized how huge of a mistake I made here, and I apologize to both of you: Debt DOES indeed exceed money in circulation, obviously, and I'm actually not even sure why I said it doesn't. Brain fart maybe? I'm sorry about that...you guys are both correct on that point.

Nevertheless, I still stand by my other points and my later posts, though: Except for interest on the very last loan during 100% deflation, there is still enough money to pay the interest.


Wow, wrong again. I suggest you watch that "Money as Debt" video suggested to you. It is very helpful.


You said, "It doesn't have to be loaned out again", but I am saying it WILL be loaned out again because that is how banks make money.. They collect interest on the loan, and it is the INTEREST that is used to pay the employees, dividends, reinvested, etc.. They don't use their reserves to pay employees, which is what you are inferring..

Sorry if I misspoke (Did I? Maybe you just misunderstood me) - I certainly meant they use interest to pay their employees and shareholders, and then some but not all of this interest is funneled back into reserves. You're right that the banks will generally loan out those new reserves out again in practice (the portion they don't pay to employees and shareholders, that is), since they want to make money, as you said: But then this money will circulate to keep the cycle going anyway, preventing the 100% deflation scenario from ever actually occurring and preventing it from being absolutely inevitable for the last debtor to default on his interest payment (since there will never be a last debtor).

It really does "work," as in, there really is theoretically enough money for everyone to pay both principle and interest (except for the last debtor in a 100% deflation scenario), but "debt as money" is still a horrible system for a plethora of economic and principled reasons.

BTW, sorry to double-post reply to you. It looks like you're still going through this thread, and for all I know, you've already "gotten it" by now. I'm not merely ignorant of how money is created as debt; I really have thought about this very hard, and I used to think of it the same way as you do right now until AceNZ set me straight some months back. Hopefully my small example in the last post helped to convince you I'm not full of shit. ;)