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What if there was Zero debt?

Discussions about the economic and financial ramifications of PEAK OIL

Re: What if there was Zero debt?

Unread postby evilgenius » Mon 23 Oct 2017, 20:32:06

kanon wrote:
evilgenius wrote:You people who are constantly calling for an end to the Fed and wailing about the evils of fiat currency are actually calling for the rule of the king. You fail to understand that fiat currency comes with the expansion of democracy. . . .

The current FED system is not about democracy. This is another argument that does not look at the facts. I certainly agree that money system we should have would work hand in hand with democracy, but it would not be the debt money of the FED system and we would not need federal debt to maintain the money supply. The greenback is a possible example of such a money system, but the credit/banking system would be different due to removing fractional reserve lending, i.e. the ability of banks to issue money.

In fact, the implication that we have a vital functioning democracy due to FED debt/money is ridiculous. The truth is more like democracy has become meaningless as the public and government are forced ever deeper into debt. Student loan debt seems a great example here.

You sound just like the average Christian, who, without the Holy Spirit, can read the bible and not understand a word of it. You should learn to question the spirits, for they can operate against you. You appear not to understand what fractional reserve banking is, nor where to get your news.
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Re: What if there was Zero debt?

Unread postby kanon » Mon 23 Oct 2017, 20:50:00

Outcast_Searcher wrote:
radon1 wrote:According to statistics, the world as a whole runs a sizeable trade surplus, which hints at imperfection of statistics.

On a wider point of a debt-free condition, a debt-free condition means moneylessness.

Well, aside from using a credit card for convenience, and paying it off (interest free) in full every month, unless I'm missing something, I literally haven't had ANY debt in 14 years.
So this means I have no money? Because, somehow, I seem to be enjoying my retirement and untroubled by bill collectors, for someone with no money.
...
Now, if you mean a modern first world economy overall can't operate AT ALL efficiently without any debt -- I strongly agree.

In the current FED system. money is created by funding bank loans, so there is always debt to correspond with the new money. Then the money circulates and people who do the right things can accumulate savings or investments, and make their payments. Other people will not be able to do that and they end up in poverty. You can think of the money supply as like a bathtub with the spigot open and the drain open. The water level is the money supply and if the banking cartel reduces loans the money supply drains down when payments on debts exceed new debts. If they increase loans to more than the repayments of existing loans, the money supply raises up. The money in the tub is circulated around with transactions, but eventually it goes to make a bank debt payment and that is the end of that unit of money. In the case of someone with no debts and savings or investments, the risk of the bank closing or the market crashing is how the debt/money would disappear.

Our own personal experience with money does not give much guidance in understanding the money system.
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Re: What if there was Zero debt?

Unread postby evilgenius » Mon 23 Oct 2017, 21:01:08

That's not entirely true. What happens is that debt creates money. A better analogy would be breathing. If hydrogen bonding fails, then the action of the muscles separates from the lungs, and the expectation of growth ends. You, Kanon, are acting directly to bring about that separation.
Last edited by evilgenius on Mon 23 Oct 2017, 21:04:31, edited 1 time in total.
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Re: What if there was Zero debt?

Unread postby vtsnowedin » Mon 23 Oct 2017, 21:02:56

Our own personal experience with money does not give much guidance in understanding the money system.

kanon



Apparently your personal experience has not given you much guidance.
Leading a sheltered life are we?
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Re: What if there was Zero debt?

Unread postby radon1 » Mon 23 Oct 2017, 21:11:56

vtsnowedin wrote:
radon1 wrote:According to statistics, the world as a whole runs a sizeable trade surplus, which hints at imperfection of statistics.

On a wider point of a debt-free condition, a debt-free condition means moneylessness.

If if you were right, which you most certainly are not, the world will never be free of the current years taxes so we will never be debt free so need not worry about running out of money. :)


Collection of taxes does not necessarily require money. Moreover, initially taxes were collected in a natural form. Money were introduced as a tool for redistribution of taxes so collected.

Broadly, Eastern imperial bureaucracy, who dealt with these money, sought to privatize their position, which otherwise fully depended on the emperor's goodwill. For this purpose, they used European city states as offshore zones for parking the money they managed to draw from the emperor's net. This was how the financial money (capital) initially formed. And once it was formed, it had no other way other than being lent and become real money as commonly understood. Thus, debt-free condition existed only in two instances - before money were introduced, like in natural economy; and before they began to be offshored. The latter stage was brief and inherently unstable, and in any event, the money at this stage were not real money as they are perceived to be. They were just a redistribution tool, like under a rationing regime. (Even in the Soviet Union, where money were also pretty much a redistribution tool, borrowing was commonplace). Therefore, debt-free condition can only exist in a moneyless setting.
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Re: What if there was Zero debt?

Unread postby vtsnowedin » Mon 23 Oct 2017, 21:34:04

radon1 wrote:
vtsnowedin wrote:
radon1 wrote:According to statistics, the world as a whole runs a sizeable trade surplus, which hints at imperfection of statistics.

On a wider point of a debt-free condition, a debt-free condition means moneylessness.

If if you were right, which you most certainly are not, the world will never be free of the current years taxes so we will never be debt free so need not worry about running out of money. :)


Collection of taxes does not necessarily require money. Moreover, initially taxes were collected in a natural form. Money were introduced as a tool for redistribution of taxes so collected.

Broadly, Eastern imperial bureaucracy, who dealt with these money, sought to privatize their position, which otherwise fully depended on the emperor's goodwill. For this purpose, they used European city states as offshore zones for parking the money they managed to draw from the emperor's net. This was how the financial money (capital) initially formed. And once it was formed, it had no other way other than being lent and become real money as commonly understood. Thus, debt-free condition existed only in two instances - before money were introduced, like in natural economy; and before they began to be offshored. The latter stage was brief and inherently unstable, and in any event, the money at this stage were not real money as they are perceived to be. They were just a redistribution tool, like under a rationing regime. (Even in the Soviet Union, where money were also pretty much a redistribution tool, borrowing was commonplace). Therefore, debt-free condition can only exist in a moneyless setting.

Coins of precious metal were invented about 700 BC and have been popular ever sense.
I don't know of which emperor or empire you speak of but lets move up to at least the last century shall we.
The present system was put in place about 1935 and had a major revision with the end of the gold standard 1970's. Except for the severe inflation of the Carter years it has worked pretty well but the present 20 plus trillion national debt is perhaps the greatest test it will ever see.
As bad as the gold bugs like to make it out it is better then the panics and bank runs and periodic shortages of specie (hard money) that repeatedly came about before 1917.
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Re: What if there was Zero debt?

Unread postby kanon » Tue 24 Oct 2017, 13:24:06

There are a several little known books on the history of money. The most thorough and exhaustive is the The Lost Science of Money, and the excellent book by Alexander Del Mar A History of Money in Ancient Countries from the Earliest Times to the Present
See also: Soddy, Frederick (1934) The Role of Money
Graeber, David (12 July 2011). Debt: The First 5,000 Years.

Unfortunately, ignorance of usury among the religiously anointed and obstinate defense of the status quo serve to defeat any rational discussion here. But I should not be surprised since ignorance, confusion, and misdirection are the characteristics of most information and discussion of the money system. Since the money system is the fundamental political issue, it is never discussed publicly in any depth. I would give one warning to those who care to listen. The FED has periodically inflated and deflated the money supply according to the best advantage of the banking cartel and the oligarch class of the time. The housing bubble and 2008 crash, followed by the QE issuance of money to their cronies are the latest example. Merely by withholding loans at a critical time, the banking cartel can crash the economy with a sudden deflation. As the 0.01% acquire vast wealth and power, when will it be to their advantage to deflate the system? My last comment on this thread.
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Re: What if there was Zero debt?

Unread postby radon1 » Tue 24 Oct 2017, 13:29:18

kanon wrote: Since the money system is the fundamental political issue,


Money are totally apolitical.
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Re: What if there was Zero debt?

Unread postby vtsnowedin » Tue 24 Oct 2017, 14:38:00

kanon wrote: I would give one warning to those who care to listen. The FED has periodically inflated and deflated the money supply according to the best advantage of the banking cartel and the oligarch class of the time. The housing bubble and 2008 crash, followed by the QE issuance of money to their cronies are the latest example. Merely by withholding loans at a critical time, the banking cartel can crash the economy with a sudden deflation. As the 0.01% acquire vast wealth and power, when will it be to their advantage to deflate the system? My last comment on this thread.
The housing bubble was caused by the passage of the Community reinvestment act where the Dems secured the Black vote by letting them buy houses they couldn't afford. The realtors and bankers took advantage of course and actually stripped a lot of poor people of whatever savings they had.
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Re: What if there was Zero debt?

Unread postby Outcast_Searcher » Tue 24 Oct 2017, 15:27:36

radon1 wrote:
kanon wrote: Since the money system is the fundamental political issue,


Money are totally apolitical.

But the fighting OVER money/wealth (and who gets to take it from whom) are at the CORE of politics -- and has been throughout written history -- as access to money implies access to resources -- which are required for power.
Given the track record of the perma-doomer blogs, I wouldn't bet a fast crash doomer's money on their predictions.
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Re: What if there was Zero debt?

Unread postby Outcast_Searcher » Tue 24 Oct 2017, 15:33:18

radon1 wrote:Collection of taxes does not necessarily require money. Moreover, initially taxes were collected in a natural form. Money were introduced as a tool for redistribution of taxes so collected.

Well, in a modern economy, unless you want to deal in chickens or granny's jug of moonshine -- taxes involve collecting (i.e. taking) money.

Talking about tax collection many centuries ago doesn't have much relevance today -- hence the idea of not bringing a knife to a gun fight.
Given the track record of the perma-doomer blogs, I wouldn't bet a fast crash doomer's money on their predictions.
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Re: What if there was Zero debt?

Unread postby radon1 » Tue 24 Oct 2017, 17:17:58

Outcast_Searcher wrote:

Talking about tax collection many centuries ago doesn't have much relevance today -- hence the idea of not bringing a knife to a gun fight.



The point in question is not today's affairs, it is rather the possibility of zero debt. It cannot be addressed without discussing the nature and origins of money. These origins are directly connected to tax collection many centuries ago.
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Re: What if there was Zero debt?

Unread postby evilgenius » Tue 24 Oct 2017, 20:19:32

kanon wrote:There are a several little known books on the history of money. The most thorough and exhaustive is the The Lost Science of Money, and the excellent book by Alexander Del Mar A History of Money in Ancient Countries from the Earliest Times to the Present
See also: Soddy, Frederick (1934) The Role of Money
Graeber, David (12 July 2011). Debt: The First 5,000 Years.

Unfortunately, ignorance of usury among the religiously anointed and obstinate defense of the status quo serve to defeat any rational discussion here. But I should not be surprised since ignorance, confusion, and misdirection are the characteristics of most information and discussion of the money system. Since the money system is the fundamental political issue, it is never discussed publicly in any depth. I would give one warning to those who care to listen. The FED has periodically inflated and deflated the money supply according to the best advantage of the banking cartel and the oligarch class of the time. The housing bubble and 2008 crash, followed by the QE issuance of money to their cronies are the latest example. Merely by withholding loans at a critical time, the banking cartel can crash the economy with a sudden deflation. As the 0.01% acquire vast wealth and power, when will it be to their advantage to deflate the system? My last comment on this thread.


You are diving away from discussing the importance of people like Milton Friedman to this discussion. Instead you seem to insist that we see the system as beholden to a cabal. I don't deny there is, or has been, corruption. I just don't think that it is nearly as important as what has transpired in economic thought.
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Re: What if there was Zero debt?

Unread postby vtsnowedin » Tue 24 Oct 2017, 20:23:30

radon1 wrote:
Outcast_Searcher wrote:

Talking about tax collection many centuries ago doesn't have much relevance today -- hence the idea of not bringing a knife to a gun fight.



The point in question is not today's affairs, it is rather the possibility of zero debt. It cannot be addressed without discussing the nature and origins of money. These origins are directly connected to tax collection many centuries ago.

I'm sorry Radon1 but the realities of today do not include Kings and Emperors with slaves working mines and armies forcing remote provinces to pay tribute in talents of gold or silver.
Today's reality is complicated enough without trying to match it up with a centuries past structure.
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Re: What if there was Zero debt?

Unread postby mmasters » Tue 24 Oct 2017, 20:41:08

History has shown that a debt based money system works the best. The people involved with money creation have always taken a sizeable cut but it's not as bad today as it was in the past with people like the Rothchilds.
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Re: What if there was Zero debt?

Unread postby evilgenius » Tue 24 Oct 2017, 20:58:24

And, of course, there is the question of what will happen when the non-debt based forms of money, which are popping up everywhere in these virtual currencies, begin to take over. Yes, they will take over. In the same way that no one could have imagined that Sears would be in the position it is today as recently as a few decades ago, they will take over. When you arrive at the doorstep of the people with cheapest price, they don't really care what the implications down the road will be. But they are like operating under a gold standard, but without physical coins. They are dangerous indeed. The imbalances they will create will never let up, unlike when governments eventually respond to the cries of the people. The blockchain simply doesn't care. It will never care. And neither will those holding all the virtual money. Once the imbalances set in, I think it will lead to calls for mass participation rather than dropping the thing altogether. They will say, in the same way that the internet has used the debasement of privacy in social media and online retail, that knowledge of how the people use money as a whole is all that is required to fix things. But there will be no inherent regulator, corrupt or not. It will be a huge unthinking, inhumane mess.
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Re: What if there was Zero debt?

Unread postby radon1 » Tue 24 Oct 2017, 21:43:23

vtsnowedin wrote:I'm sorry Radon1 but the realities of today do not include Kings and Emperors


The realities of today include capital, and once capital is in place, debt-free existence is out of the question. As long as you are happy to accept capital as given without giving much thought to its origins, everything is fine.
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Re: What if there was Zero debt?

Unread postby evilgenius » Wed 25 Oct 2017, 11:29:15

The worst loss under a crypto currency dominated future would be the will to power that debt based systems give man. What people with desires or ideas can do today is borrow in order to fulfill their vision. Like the kings of old, they can fail and undergo bankruptcy, but there are provisions in the system for their credit to recover over time. The system will loan them money again. Most entrepreneurs are serial entrepreneurs. Many of those have gone bankrupt at some point in time. You can say that some version of begging, an online call for funds from a wide diversity of parties, might serve to make up the difference. That's a fair assumption, but I think it leads to compliance rather than an exercise of will. As it stands now, once an entrepreneur has been approved they can spend their money as they like. It is assumed they have a vision and will either fulfill it or not. Unless there are restrictions that come with the loan, meeting performance standards or making arranged payments in time, there is no callable attribute upon a person's vision. If they can qualify, they can take the chance. And the success of the chance is up to them. Mass appeals are a dangerous thing that runs counter to this, in that they force a level of compliance that threatens the personal autonomy of the entrepreneur in a manner that can threaten the nature of their vision before they start working at putting it into practice. It's one thing to face enforced change because of pitting one's self against the natural world, and having to realize your vision was too wide, and another to supplant your vision in order to prosper mediocrity. Mankind needs those who have vision. They are the people who have driven civilization forward. Yes, there is wisdom in the crowd, but that wisdom is a counting type of wisdom. It doesn't see what cannot be seen without the eye.

We all know that the system is corrupt, but the essential corruption doesn't lie in the structure. The corruption lies in the implementation. It lies in the greed to make loans to people for other purposes than the will to power. It lies in excusing paltry things, like restaurant tabs, as being, in some fashion, at least a shadow of the will to power. The egregious excesses are built out of wrongful use of debt. The bankers, whom so many call out as traitors, are there to help, but they can easily see how much more money they can make by making loans for purposes outside of fulfilling the will to power. It's easy for them to get away with it as well because the people want so many things and an untrained people who don't know the value of contentment are prone to give such high place to their wants that the temptation to allow excess is overwhelming. When people use debt in order to comply rather than to become they run the risk of falling into this trap. A simple way to see the difference might be to ask if the thing that has been purchased with debt provides an income greater than the cost of servicing the debt. If it doesn't, then it could be debt incurred in order to comply. Debt that is used to purchase assets that are too high risk is also dangerous. That's a shady line, though, because some people are good at managing high risk assets. Housing is the greatest driver of debt, and, yet, a house can't really be called an asset. You can't call a house an asset when upon selling the one you live in you immediately discover that you have to live somewhere else. Unless a person is downsizing, there is no profit in the scheme. You can see the corruption present in the system when you look at housing. The thing is, it would be much too pedantic to rid the world of it altogether. People do have to live somewhere. And people do have to eat. If they cannot have those simple things, then the very achievement of them can seem like the will to power.

I could wail on and on, but the basic truth is that becoming a debt slave is a person's own choice. It has to be. But the regulation in the system ought to be stricter, and the education of the people - before they get old enough to be considered personally responsible - ought to be greater. Along with those changes, there is another thing which hangs palpably in the air to me, and that is how we must address the role of privilege in society. We have attempted to use loose borrowing standards, which act against borrowing as primarily a tool to achieve the will to power in individual lives, as a means to address lack of opportunity and suppression that the prevalence of privilege spreads throughout society. We can only get so far with that, after which other things have to happen. Money can't do everything.
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Re: What if there was Zero debt?

Unread postby vtsnowedin » Wed 25 Oct 2017, 11:58:29

evilgenius wrote: Housing is the greatest driver of debt, and, yet, a house can't really be called an asset. You can't call a house an asset when upon selling the one you live in you immediately discover that you have to live somewhere else. Unless a person is downsizing, there is no profit in the scheme.

Totally disagree. Because you need shelter dose not mean that if you have acquired that asset you cant sell it. Like food in the freezer or a commuters car in the driveway having assets on hand relieves you of the need to go out and acquire it. And of course a house can be much more then your immediate shelter needs so you can sell the house and rent just what is necessary. If you didn't need a house you would rent it out so in effect you are renting it to yourself if you live in it.
The profit lies in the differences in bottom line between renting from someone else and having control over maintenance expenses and price appreciation over the years. That doesn't mean people should use their houses as ATM machines or that the lending banks should allow it.
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Re: What if there was Zero debt?

Unread postby GHung » Wed 25 Oct 2017, 12:34:17

vtsnowedin wrote:
evilgenius wrote: Housing is the greatest driver of debt, and, yet, a house can't really be called an asset. You can't call a house an asset when upon selling the one you live in you immediately discover that you have to live somewhere else. Unless a person is downsizing, there is no profit in the scheme.

Totally disagree. Because you need shelter dose not mean that if you have acquired that asset you cant sell it. Like food in the freezer or a commuters car in the driveway having assets on hand relieves you of the need to go out and acquire it. And of course a house can be much more then your immediate shelter needs so you can sell the house and rent just what is necessary. If you didn't need a house you would rent it out so in effect you are renting it to yourself if you live in it.
The profit lies in the differences in bottom line between renting from someone else and having control over maintenance expenses and price appreciation over the years. That doesn't mean people should use their houses as ATM machines or that the lending banks should allow it.


I think it's telling how many Americans refer to a "house" and not a "home". I have to wonder how much our largely urban/suburban cookie cutter housing, co-owned by a bank, has destroyed any sense of place in our culture, and how important having a sense of place (feeling at home) is to a society's psyche.

I built our home to be a 'permanent' family place, have managed to keep it debt free, and my only co-owner is my wife. While our children are spread far and wide, they know they always have "home" to run to if things get bad; a home that is, at least in part, self-sufficient and un-encumbered. Since we plan to stay here until death, it's monetary (appraisal) value isn't very relevant. Same for our nearly 50 acres. Most of the adjoining property is also family property.

See "Placelessness":
Places that lack a "sense of place" are sometimes referred[by whom?] to as "placeless" or "inauthentic."[citation needed] Placeless landscapes are those that have no special relationship to the places in which they are located—they could be anywhere.[original research?] Roadside strip shopping malls, gas/petrol stations and convenience stores, fast food chains, and chain department stores are often cited[who?] as examples of placeless landscape elements. Some historic sites or districts that have been heavily commercialized for tourism and new housing estates are defined as having lost their sense of place[citation needed]. Gertrude Stein's "there is no there there" has been used as a description of such places.[2].....
https://en.wikipedia.org/wiki/Sense_of_ ... celessness
Blessed are the Meek, for they shall inherit nothing but their Souls. - Anonymous Ghung Person
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