‘We are caught in a systemic debt trap’

Our world faces a large, profound, and very important problem: systemic debt.

We are each and all in debt, whether or not we have actually borrowed from anyone.

This is because our financial system is based on debt and interest on debt.

Our individual interest payments are disguised as taxes and hidden in the inexorable price inflation we each experience.

You are already directly in debt if you are a citizen of a country in debt, and all countries are in debt. The fact of your citizenship makes you liable even if you don't think you are personally in debt to anyone.

The collateral for each country's interest-bearing debt is the ability of its inhabitants to work and pay taxes. The taxes are used to cover the nation's interest payments, and since the interest is compound interest our financial system is biased toward unstoppable exponential growth reflected in price inflation.

So it becomes imperative to grow the economy in line with exploding interest-bearing debt so that money does not lose its purchasing power in terms of goods and services.

But real world growth is limited by the laws of physics (broadly construed) and ecology, since we live in nature; and by the laws of psychology and sociology since we live in cultures and are all real beings with finite needs. For example, no single person can live in a thousand houses. And we can each eat only so many meals in a day.  


http://www.iol.co.za/capetimes/we-are-caught-in-a-systemic-debt-trap-1.1153270