Question From a Nuclear Physicist

[JamesNZ]

I have a friend who's a nuke-physicist and he asked me this question:

Q: I f there were no debts in our money system there wouldn't be any money.

Yes/No and why

[donaldfarkas]

i googled your question to see if your friend thought up the question himself.

"Irving Fisher, economist and author “That is what our money system is. If there were no debts in our money system, there wouldn't be any money."

[Rubberman]

And, I think the reason is that money itself is a debt, that the issuer of the money (script, check, govt-issued gilt) is making a promise to pay the bearer on demand, or to exchange it for something of equal "value". Back in the day, the US issued money as "silver certificates" in that upon demand, you could get an equal amount as the value of the bill in silver. Sometime about 50 years ago this practice was halted. Now, your U$D are about worth the paper they are printed on...

[cousinlucky]

I suggest that you go through the archives of the Mises Institute!! Just Google them or lewrockwell for a deluge of information on the subject.

[rcgreen]

Our money system, the way it is presently constructed,
is based on government debt, but that doesn't mean
that money is theoretically based on debt.

Money is merely a commodity that is especially suited for
exchanging for other items, and being the measure
of other items' value. It doesn't have to be based on
gov't debt, but governments find this very convenient,
so that they can create as much money as they want,
or as much as they dare. It enables them to run a budget
deficit perpetually.

[jhonan]

I'd love to know how him being a nuclear physicist has any bearing on the question.

[MASONTX]

Each molecule is stable, with a balanced charge of protons and electrons. If you strip off some of those electrons, you may achieve your immediate purpose, but at some point the scale needs to be balanced. If you keep stripping off more and more electons, but don't ever balance the charge, what happens? The econeomy is similar.

[jhonan]

Ah! - It makes so much more sense when you describe it like that.

Now, if you could just think of some analogy involving the linux kernel, we'd open it up to a whole new audience.

[zenwalker]

The concept of periodic debt forgiveness (i.e. every seven years) is what led to the Statute of Limitations. It needs to be reinstated for equity and Justice's sake. ( O listen to the corporate outcry!)

[MASONTX]

Would you sell your house on a 30 year note if you knew that in 7 years you would have to wipe it out? Banks, businesses, lenders of all kinds, and home sellers who finance would all make only 7 year loans or less. The down payment requirements and monthly payments would kill the housing industry.