You know what money we use in everyday life is? All banknotes, bills and other paper “stuff” would have been normal colored paper, if mankind had not agreed to exchange them for anything; It would have not made them a universal medium at goods and services exchange.
The real money is debts, glorified IOU. It is simply recorded on paper that someone (this chain begins with the bank) has given you a loan of some sum of money, which actually the bank doesn’t have. It is nowhere to be found. The government has allowed this activity, so your money can be exchanged at any other bank, shops, markets for anything.
But the money taken in the bank has to be returned sooner or later, and returned with interest. But where to take it if the money in the economy is not secured? There is only one way out: to pay interest to the bank with the money borrowed. And here is the “credit bubble”, which in 2008 might have led to the collapse of the US banking system.
The American system of public debt is essentially the same pyramid, but here money is not borrowed but printed in any quantity, secured not with goods and services, but with government bonds, ie State pledges to pay you in the money form or property one at maturity.
In order to provide Americans with the usual high standard of living accepted in the times when the US economy was on the peak, and there was less population in the country, the state has created a whole system of grants-in-aid, privileges, subsidies and other payments from the budget.
Similarly the political system of presidential elections (for four years and not more than two terms) has had a considerable impact on the increase of budget expenditures, which at first causes candidates to promise manna from heaven in the short term, and then the presidents have to fulfill their promises, ie to provide a high standard of living. in no case should Americans begin to pay more taxes or work more, otherwise the President won’t see the Oval Office again.
The desire to be superior in the whole world makes the United States have a large army with good contemporary (and therefore expensive) weapons and have numerous military bases around the world.
But if the US is able to provide all of this through its own economy? The answer is – no. But the United States has found a method as plain as day – they have started a printing press. And off they go!
Continue to the Part 2