[chii]

> they are literally creating new money into existence.

Debt is new money, but this new money is _different_ from printed money. It's because the debt has to be repaid, which implies you have to have the ability to repay (otherwise who would do the lending?). Therefore, this implies that production increases at a rate that is at least the same as, if not higher, than interest rate charged.

[neilwilson]

It’s no different from money. It just has a longer duration.

Overnight money is repaid every day and replaced with a new loan for the following day. That also happens with so called “debt”.

Money and debt are fundamentally the same thing. They are issued by the same entity which has the same lifespan. Necessarily the debt can never be “paid off”. All that happens is the assets are swapped around.

Lending happens automatically as a function of accounting for a payment journal. The only people who get excited about it are those who are hard of accounting.

Money is debt. Time to accept that.

[chii]

Never denied that money and debt are the same. I am denying that printed money is the same as debt money.

[kelipso]

You are talking about printed money as in real world coins and paper/cloth cash? That's just not relevant at all in this age.

[chii]

no, i'm not talking about physically printed money. I'm talking about generating money not via debt, but via "wishing" it into existance.

Banks generate money via debt. This is OK. If the treasury starts printing money - like what Zimbabwe or Venezuela did (or the Weimar Republic[1] pre-WW2) - then you will get rampant inflation.

[1] https://en.wikipedia.org/wiki/Hyperinflation_in_the_Weimar_R...

[mejutoco]

I am not so sure debt has to be repaid.

Debt is supposed to be repaid, or should be repaid, or comes with great declarations of an intention or obligation of being repaid, but debt can be kept indefinitely.

Cases from the top of my head:

- IMF lends money to country. Later the country is insolvent, and the credit is renegotiated to a lower amount (same for mortgages) as opposed to getting nothing.

- Parents "lend" money to children for house downpayment. Parents died without debt having been paid.

- World ends tomorrow by $reason_of_your_choice. All the existing debt gets cancelled.

- Friend lends some money to another friend. They fall out and never repay the debt, and everybody lets it go.

[xyzzy123]

- Ideally, your economy grows faster than the debt grows. In the best case your debt can sustainably grow forever.