Imaginary Money and Inescapable Debt

The world economy is stumbling forward in fits and starts, unable to find growth in any sector.  Banks are beginning to charge negative interest, where it costs you money to deposit yours in a bank.  Yields on bonds, the world stock markets, everywhere things are just barely holding their own.  Perhaps the times of imaginary money are drawing to a close, the times when wealth could be created out of thin air.

When a person defaults on a loan, unable or unwilling to make the payments, the people who own the loan have the opportunity to sell it to a collection agency.  Usually, collection agencies buy debt at a fraction of the face value, say, thirty cents on the dollar.  This is their incentive to collect the debt, the difference between their costs and the total amount of the debt.  But they go beyond that profit level, and charge ‘acceptance fees’ for taking the debt, and this cost, and that cost, until they have added nearly the entire face value of the original debt to the amount the person owes.

From personal experience, I can attest that a 600 dollar delinquency can balloon into a $2000 dollar debt in nothing flat.  These fees, and added costs, and penalties, are just creating wealth out of nothing, no work, no investment, just by saying it is so.  Well, as in my case, I didn’t pay back the debts, or the fees, fines, and other charges, so where is the money that I didn’t have?  Some accounting agency would have listed it in the books of the company I was borrowing from as an asset, which could be used to secure, or justify, another loan from another bank.  Another bank may have loaned that money that I was supposed to pay out to somebody else.  Did part of your car just suddenly disappear?  Or is it just gradually going away?

Real wealth takes real work to create, adding value to something, digging it out of the ground, providing a service.  To claim that wealth created by saddling more debt on someone who is in arrears is real merely prolongs the illusion that we can grow out of our huge indebtedness.  Debt is strangling our society, this relentless pursuit of what someone claims someone else owes them.  It is pure materialism rotting away the spiritual nature of human existence.  We are here because we have worked together and shared what we created.  Denying people employment because of poor credit history is completely counter productive and self-defeating.

Money has become worth less and less, in spite of the supposed low inflation rates.  Corporations are constantly getting caught violating ethical standards, trying to raise profit margins so that the shareholders will benefit more.  I don’t see the benefits of being a shareholder in a company that goes broke because the only goal of management is to cut costs and raise margins.  Companies were started by people who wanted to provide a service or a product that they could be proud of.  Making huge profits is a fun fantasy, but rarely has this happened.  Instead, steady growth, re-investment of profit back into the company, improving relations with the workers, these have been the backbone of economic growth.  Bringing prices down as development costs are absorbed used to be common.  Now, reducing prices is unthinkable, even if production costs have been drastically reduced.  Improving compensation for the people who actually create the wealth seems to be out of the question, too.

We are scrabbling after imaginary money, trying to fuel our materialistic perversion.  All of us are broke, because there is so much debt that it has destroyed all the money.  Personal debt in the United States now totals nearly 11 trillion dollars, and then there is the corporate debt, and the government debt.  What percentage of the total money supply is debt?  Is debt being loaned out to create more debt?  How much of that debt is imaginary money, created by inescapable debt?  We are the richest broke people who have every lived.

At least the war on the middle class is going well.


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