Page 17 - Michael 2024 March

The more a country is developed,

The more indebted it is!

This explains why the entire debt cannot be paid
back and why people become increasingly indebted. The
If this is so, should the sum of all debts not be whole
greater than it is? world is
The amount of debt would be much greater if chained
some of the debts were not cancelled rather than be- up in
ing repaid. debts.
Some debts are extinguished because of bank- FINANCIAL
ruptcies. In such cases, debt is not paid back, or is SYSTEM
only partially repaid, and the borrower’s collateral is A sick tree will only bear
forfeited. bad fruit. Shifting a burden from
Other than bankruptcies, factories close and one shoulder to the other does not lighten the
farms are abandoned. Misery follows for the dispos- load; it only creates conflicts of which many exist
sessed. This is the bitter fruit of a system that re- today.
quires that more money be repaid than was created.
What occurs between indebted individuals is
A burden that is passed similar to what occurs between indebted countries.
onto the shoulders of others The sources of conflict between individuals are the
same as those between nations, and the results are
Some businesses manage to pay back their also similar.
loans and interest charges. Others manage to en-
large their businesses without having to borrow Can we not find a financial system that does
money from the banks. Some governments may at not force us into debt at the rate at which wealth
times decrease their public debt. is created?
All of this is true. Some will manage. But as a Yes; one has been offered for several decades:
whole, they cannot. Those who succeed in finding Economic Democracy, or Douglas Social Credit.
$106 where only $100 was created, find the remain- Economic Democracy would not create unpay-
ing $6 in the circulation of other people’s loans. The able debts since it would create money at the rate
result is that the latter group of borrowers will have goods are produced, and remove it from circulation
more trouble paying back their own loans. at the pace of consumption.
The success of a few will make the cases of For a limited time, it is possible to consume more
others more desperate. than is produced because of previous surpluses. It is
Businessmen who finance their projects without generally impossible to do so as one cannot make
borrowing do so with money obtained from the pub- a loaf of bread, a pair of boots, or a safety pin dis-
lic by inflating prices to cover their expenses. This is appear unless it was first manufactured.
called self-financing. But self-financing is not some If money was issued according to production
type of automatic financing; it is financing at the ex- and cancelled following consumption, a system of
pense of consumers. This results in buyers depriving perpetually increasing debt would be inconceivable.
themselves of necessities because inflated prices on An individual or a group of individuals could still
some goods exhaust their purchasing power. This is go into debt; but as a whole, public debt would not
another example of the bad fruit that results from an exist. On the contrary, the increase in real wealth
unnatural and unhealthy financial system. would be expressed by an increase in financial
As for governments who are able to reduce their wealth; instead of taxes and inflated prices, indi-
public debt, it is because they too take from the pub- viduals would receive dividends and discounts on
lic more money through taxes than they return into prices.
circulation through public spending. With govern- The present system is based on a lie and on
ment debt repayments, financed by taxes, the popu- false accounting. Economic Democracy offers pre-
lation’s reduced volume of money cannot purchase cise accounting: an exact financial representation
available goods. The result is the same: fewer prod- of economic realities. The former can only bear bad
ucts are purchased, and goods remain unsold. There and bitter fruit; the latter would yield an abundance
is total or temporary unemployment for many, and of good fruit to be shared by everyone. v
businesses close for failing to sell their inventory. Louis Even

www.michaeljournal.org MICHAEL March/April 2024 17