The professor claims the more you waste and the more debt you have the richer you are. Those are NOT his words but that is the message he is sending. No need to cut waste and don’t worrty about debt, it’s a self sustaining system. Why on earth do governments insure bank deposits if nothing can go wrong?
In the second video he sets up an accounting system that demonstrates that the system is infallible. As long as every business has paying customers the system works but what happens when no one wants to buy a company’s products? The company can’t pay its debts and the system goes into reverse gear. Somehow the professor misses that point.
One needs to understand money. When you make widgets that people want you earn money. In other words, you create wealth, society is in debt to you for the wealth you create. In that sense, money is debt. At any moment you can use that money to get stuff from other wealth creators. That was the end of the story of money until the invention of fractional reserve banking. If banks are required to have a 10% reserve every $100 deposited can create $900 worth of loans.
Deposit
Loan
$100.00
$90.00
$90.00
$81.00
$81.00
$72.90
$72.90
$65.61
$65.61
$59.05
$59.05
$53.14
$53.14
$47.83
$47.83
$43.05
$43.05
$38.74
$38.74
$34.87
$34.87
$31.38
$31.38
$28.24
$28.24
$25.42
$25.42
$22.88
$22.88
$20.59
$20.59
$18.53
$18.53
$16.68
$16.68
$15.01
$15.01
$13.51
$13.51
$12.16
$12.16
$10.94
$10.94
$9.85
$9.85
$8.86
$8.86
$7.98
$7.98
$7.18
$7.18
$6.46
$6.46
$5.81
$5.81
$5.23
$5.23
$4.71
$4.71
$4.24
$4.24
$3.82
$3.82
$3.43
$3.43
$3.09
$3.09
$2.78
$2.78
$2.50
$2.50
$2.25
$2.25
$2.03
$2.03
$1.82
$1.82
$1.64
$1.64
$1.48
$1.48
$1.33
$1.33
$1.20
$1.20
$1.08
Sum
$890.30
but that does not guarantee that the borrowers can pay it back. because no wealth has been created. If depositors ask for $101 the whole scheme collapses. To solve the problem the government prints fake, I mean, fiat money. Money that was not created by producing wealth. Wealth stays the same but more dollars circulate. How does society fix it? By lowering the value of money, a.k.a. inflation or devaluation, depending on your point of view.
The system is only sustainable as long as society produces enough wealth to maintain it. If not you get recessions or depressions, and bankruptcies which bring the system back in balance
“Elon Musk Is Wrong” Top Economist Warns
“Elon Musk is Wrong Again” Top Economist Warns the US
Money becomes debt (to the buyer) when it is used to buy a widget or a service (the buyer now has less money). At the same time, the provider of the widget or service now has more money and less debt. Thus, money can be either more or less debt, i.e., a method of transfer.
Not when you pick a fight with all the world leaders. What he isn’t thinking is that he is annoying a majority of the people. I have seen this before. Give a narcissist a big enough rope and eventually they hang themselves.
Of course, all this would be made possible by all the amazing trade deals he was going to negotiate.
Now were hearing the exact same incredible promises again, nearly word for word. And people still believe him! As intercst says “never bet against the ignorance and innumeracy of the American people.”
This is how we identify a cult of personality, both with TNG and Leon.
We’ve elected an insurrectionist who failed his oath to the Constitution and we would not hold him accountable for what he did. Instead, we elected him again. It was a nice run, but this is the end.
“I don’t pay any attention to what economists say, frankly,” Buffett said two years ago. “Well, think about it. You have all these economists with 160 IQs that spend their life studying it, can you name me one super-wealthy economist that’s ever made money out of securities? No.”
I figure “economists” are more useful as “confirmation”. You first decide what you want to do, like cut “JC” taxes. Then you find an economist with a theory, like Laffer, that you can use to legitimize what you already decided you want to do.
Maybe studying the economy is what makes economists happy, not making money from securities (or anything else). With all due respect to WB, who I adore. Just a thought that crossed by.
Everyone with an agenda, is searching for “confirmation” to legitimize their agenda.
From time to time, I have mentioned one of my favorite books “How To Lie With Statistics”, published when I was a mere lad, but still relevant today.
From the Amazon review:
“The secret language of statistics, so appealing in a fact-minded culture, is employed to sensationalize, inflate, confuse, and oversimplify,” warns Huff.
Or, as someone else said, more simply “figures don’t lie, but liars sure can figure”
Musk is picking fights with Germany, England, and Ukraine’s government. It usually goes something like “Free Speech”. I wonder why he doesn’t say anything about China? It is only going to get uglier.
