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Guest-5ty5s4
Guest
So I'm trying to formulate my idea of how the economy works and would like others to think about this too.
New money is created via debt - yes or no?
Banks lend out money, often in the form of either a business loan or a mortgage.
So let's say that I get a business loan and I hire 20 people. Those 20 people each get mortgages. Their work pays down my business loan over time, and in return I pay them wages or salaries, which they use to pay down their mortgages over time.
This would eventually cancel out my debt and their debt. New value and new wealth was created! ...Right?
Is that true? Can it really work that way across the board, or is more debt always necessary?
I'm trying to figure out how this all fits together intuitively.
Honestly, @JScott ... your expertise would be great for this question.
edit: guys...I know what value is and that it isn’t money. I’m asking people how the government, banks, etc actually function. I’m not asking for people to tell me my own ideology! I am already pro-capitalism and value
New money is created via debt - yes or no?
Banks lend out money, often in the form of either a business loan or a mortgage.
So let's say that I get a business loan and I hire 20 people. Those 20 people each get mortgages. Their work pays down my business loan over time, and in return I pay them wages or salaries, which they use to pay down their mortgages over time.
This would eventually cancel out my debt and their debt. New value and new wealth was created! ...Right?
Is that true? Can it really work that way across the board, or is more debt always necessary?
I'm trying to figure out how this all fits together intuitively.
Honestly, @JScott ... your expertise would be great for this question.
edit: guys...I know what value is and that it isn’t money. I’m asking people how the government, banks, etc actually function. I’m not asking for people to tell me my own ideology! I am already pro-capitalism and value
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