One of the main reasons US capitalism is failing so many of the American people is the monetary system. Everyone – corporations, the government and the chump with the mortgage and the car – are reliant on loans (lines of credit) from privately owned corporations called banks. These loans are charged at interest, and are backed only by the borrower’s promise to repay, not actual goods and services. (Usury)
However, in order to finance the interest payments, the economy has to grow. Growth cannot continue indefinitely in the real world, so ‘bulimic expansion’ is used to simulate growth.
What happens when the economy stops growing, as it eventually must? High unemployment, high default rates on loans, weakening of the US dollar against foreign currencies > USD reserves of non-US countries become worth less > price of middle east petroleum goes up > further downturn
This boom & bust cycle is no aberration of the system, but the result of the de-regulation of the finance sector.
It is telling that few of those that live in a capitalist society understand the nature of money. We have an intuitive understanding of money as representing value. This is exactly wrong: money represents debt. The more people are in debt, the more money there is. And everyone has to keep finding new ways to make interest repayment, lest the ever-growing, insatiable ‘debt monster’ catches up with them.
Many Americans still believe that in their society, everybody gets what they deserve – that through hard work and perservance, anyone can be rich – which is obviously not true. When falling on hard times, they would rather cast themselves in the role of oppressor than that of the oppressed.
This provides a convenient excuse for their own failure to get rich – somehow, poor people are to blame. An excuse that would not satisfy even the poorest thinker. A more advanced intellect might start looking for alternate explanations, and that would be dangerous to the Status Quo.
One of the main reasons US capitalism is failing so many of the American people is the monetary system. Everyone – corporations, the government and the chump with the mortgage and the car – are reliant on loans (lines of credit) from privately owned corporations called banks. These loans are charged at interest, and are backed only by the borrower’s promise to repay, not actual goods and services. (Usury)
However, in order to finance the interest payments, the economy has to grow. Growth cannot continue indefinitely in the real world, so ‘bulimic expansion’ is used to simulate growth.
What happens when the economy stops growing, as it eventually must? High unemployment, high default rates on loans, weakening of the US dollar against foreign currencies > USD reserves of non-US countries become worth less > price of middle east petroleum goes up > further downturn
This boom & bust cycle is no aberration of the system, but the result of the de-regulation of the finance sector.
It is telling that few of those that live in a capitalist society understand the nature of money. We have an intuitive understanding of money as representing value. This is exactly wrong: money represents debt. The more people are in debt, the more money there is. And everyone has to keep finding new ways to make interest repayment, lest the ever-growing, insatiable ‘debt monster’ catches up with them.