| Subject: | Re: [socialcredit] The condition for interest causing exponential debt growth | | Date: | Wednesday, September 28, 2005 15:01:52 (+0200) | | From: | Marc Gauvin <gauvin @.......es>
|
Upon initial reading I think you are right and I agree that the logic is an
extention of what I have expressed earlier.
Thahk you for this valuable contribution.
Regards,
Marc
----- Original Message -----
From: "Per Almgren" <info@nordspar.se>
To: <socialcredit@elistas.com>
Sent: Wednesday, September 28, 2005 10:17 AM
Subject: [socialcredit] The condition for interest causing exponential debt
growth
> 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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