The world’s money supply is currently 82.5 trillion dollars, the world’s debt it 305 trillion dollars, I repeat, the world’s money supply is currently 82.5 trillion dollars, the world’s debt it 305 trillion dollars, and that debt is climbing very fast, by the way. Just a few short months ago world debt was just 302 trillion. One might rightly ask; how can this debt ever be paid off in this system? The answer is that it cannot which is why we need to change the monetary system.
It is probably true that most people have more debt than they have money, in fact this is true of every nation in the world. This being the case one would think there would be a huge conversation about this fact and yet outside of a small circle of monetary reformers it seems to be a non-issue. Despite knowing debt is a form of slavery, as even the Bible noted, this is accepted as normal. It took 300 years to accomplish this, using force, psychologically engineered media and suppressing monetary history.
When most of the wealth created by those who labor goes to those who don’t labor, those who labor are slaves to those who don’t. It is a not-so-modern form of slavery where there is no slave master with a whip. The whip is the debt, and the threat of losing what you have if you do not labor to pay that debt to the faceless corporate owner of it. We protest vigorously against human slavery of the overt kind but tend to ignore the covert slavery of indebtedness, that debt is just accepted as business as usual.
Yes, business as usual, a business that is destroying our ecological life support system, a business that has created massive poverty and economic inequality, a business that criminalizes good science to profit from bad science, a business that seeks profits from war, illness and misery, a business that must grow or die because that is how the money system works. How on Earth could humankind have allowed such a destructive business to exist? We don’t care. This business is normalized, and we don’t care. Considering the existential threat and magnitude of the problem isn’t it surprising that so many do not care? Well, no, not if you know how the money system works and what its physical and psychological effects are.
“Since the dawn of times, monetary systems have been shaping the flows of human activity in every realm of endeavor; food production, education, health, business etc., by determining how we value, apply and exchange our creativity, and the fruits of our labor. It is for this reason the most influential of all human-made systems.” - Bernard Lietaer
While this should be obvious you will find many arguing that money is not the problem and of course money is not, not having money is the problem. To learn why we have more debt than money in the world we must look at how the monetary system works, how is money today created and allocated?
Risking more confusion, the monetary system we have does not really create money, it creates credit/debt which we use for money. Since the Fed, our privately owned central bank, was established in 1913 the commercial banks create what we use for money in the process of making loans. When a loan contract is signed a deposit is created in the borrowers account merely by entering the number, the principal amount of the loan, into the bank’s electronic ledger. That deposit, what we use for money, can then be spent into circulation in the economy. It can be done with a check or card, or it can be withdrawn from the account in cash, physical currency.
That currency is printed and minted by the government, which is why so many wrongly believe, and no one tells them otherwise, that the government creates our money. Unfortunately, it does not, despite that being one of its Constitutional responsibilities. Instead, it sells the currency to the banks, to be used for their customers cash needs. Cash, and the money in your account from your paycheck etc., is a current asset and is the first line-item on a company's balance sheet. Cash is the most liquid type of asset and can be used to easily purchase other assets, but it all originated as a debt and that debt must be paid or one defaults on their loan and loses their collateral.
Without collateral we would not be able to get a loan. Collateral is something of value pledged to secure a loan. Collateral reduces the risk for lenders. If a borrower defaults on the loan, the lender can seize the collateral and sell it to recoup its losses. Mortgages, car loans, and business loans are the collateralized loans we’re most familiar with.
However, there is more to the debt than just the principal that was created. The debt also includes the interest charged for loan. The principal created by the bank loan is what we use for money, it is how money is created in the system, so the interest we must pay must come from the principal of a loan and new loans must continually be made to pay the interest on the loans being made. This is the systemic driver of economic growth. When a loan payment is made the principal of the loan is reduced. That is money destroyed, it is no longer available for circulation, it no longer exists. The interest part of your payment goes the bank for profit and expenses. In this system when loan payments (money destroyed) exceed loans being made (money created) the system falters and crashes. This is happening every 10 years or so. However, the economy can also be crashed if the banks agree to not make any loans and instead choose to seize the collateral for pennies on the dollar.
Greening the Dollar changes the first cause of money to care, money issued as a debt-free, permanently circulating asset for the common needs. The act of creating money to spend for the common welfare makes it a care-based system which would have profound psychological effects on society and governance. What we have now is a system of usury, the sin of sins, which also has profound psychological consequences, but they are negative. Changing the money will change the way we live by replacing the profit-based system with a care-based system. It is not complicated, the first cause of money now is profit, it is issued as debt for private gain.
Monetary reform is not the end in and of itself, it is the tool we need to do the things we need to do.
If you want to dig a hole it is better to pick up a shovel than to scratch at the ground with your hands.
So, we have an urgent project, the first thing we must do is pick up the tool we need to fix it.