| Subject: | [socialcredit] The condition for interest causing exponential debt growth | | Date: | Wednesday, September 28, 2005 10:17:36 (+0200) | | From: | Per Almgren <info @........se>
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If the lenders use all their interest and other types of income to buy
goods and services, there will be no exponential growth of the debt in the
society. In that case all interest costs will turn back as income to the
rest of the society.
If the lenders choose to only use part of their income to buy goods and
services, the payers of interest won't get back all the interst paid as an
income.
The indebted will have the choice to ask for new loans to be able to keep
on their own consumption or business on the same level or to cut down their
other expenses. If they borrow, they will later on have to pay back the
loans and, during the repyament period, also to pay interest. Following
this development, we will see an exponential growth of debt.
If on the other hand, the borrowers choose to cut down their expenses, this
will of course mean buying less and that will require less income for
business firms and decreasing need for employees, i.e. increasing
unemployment rates.
It can of course be argued that if you don't use all of your income from
work or allowances to buy goods and services, there will be the same
consequences with need for new loans and / or increasing unemployment. This
is true but people who only have income from work and / or allowances
usually have substantially lower total income than people who are in the
position of being able to lend money to others. Therefore the main problem
is the behaviour of the lenders, do they use all of their income to buy
gods or services or do they use part of their income to lend new loans.
Statistics does strongly point in the direction that the more money you
have, the larger part of your income is used to lend to increase your
interst icome or invest with an expectation of profit return. So for the
society, the interest income and profit on money causes a growth of the
total debt.
Per Almgren
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The condition for 
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