Can’t create money out of thin air

Our economy is a mess. We are in debt up to our neck. Some claim that to save the economy we should go even deeper into debt — like the drunk who says he will quit drinking if you just give him one more drink. Others say we should cut back spending. Will any of this help? Unfortunately no. Nor will increasing taxes.

The real problem here is the way our money system operates and that there is simply is not enough real money in the system to pay off all our debts. The reason for this is banks are allowed to lend more money than they have on deposit (fractional banking). So if this money doesn’t exist, where does this money that they lend out come from? It was created out of thin air by simply noting in their books that we owe them “X” amount. Of course if an individual were to create their own money in some similar manner they would be called a counterfeiter.

Now it can be argued that when one agrees to take on a loan he is certainly obligated to pay it back. But in this case must that money be paid back with real money earned by actually working for it, or should it be paid back using same type of “Monopoly money” that was lent out?

Richard Gideon

Schaumburg