lunakilo
Well-Known Member
Can all loans to be payed back with interests?
I have been over this in my head a few times now and I still can't figure out the answer.
Some people have argued that tis is not possible.
The argument goes something like this:
When you loan money the bank conjures up money for you.
You have to repay this money + interests.
The sum of all money which has been conjured up only coveres the valoe of the loans, not the added interests.
To pay the interests more money has to be conjured up via new loans, and so on
Inevitably leading to someone not being able to pay back their loan.
I don't know if the above is true since money is all make believe to begin with.
Supposedly money represent the value of stuff in the world in some way. Not sure if it actually does, but still, if people accept that money has value then in some roundabout way they have also accepted that it was ok to create that money.
There is not a fixed amount of money in the world, there is as much money in the world as we collectivly make believe there is
A lot of people have argued that since there is a limited supply of resources in the world there is a limit to the value of all stuff in the world and therefore you cannot increase the amount of money in the world indefinitely (it represents the value of stuff after all) because you would run out of resources.
But does this make sense? Stuff don't have a fixed value either. The value of stuff is only that which people are willing to pay for it.
If you have an old chair it might have decreased in value because it is old an worn, or it might have increased in value because it is a rare specimin.
So
1) with the current system it it possible to repay all loans. Why/why not?
2) If it is possible how likely is it that only the really stupid people who obviously take out loans they never should have taken out will be the only ones who cannot pay back their loans?
3) Even if it is theoretically possible for a banking system of the type we have now to work, is the system being run so irresponsibly that it just won't work in the long run?
I have been over this in my head a few times now and I still can't figure out the answer.
Some people have argued that tis is not possible.
The argument goes something like this:
When you loan money the bank conjures up money for you.
You have to repay this money + interests.
The sum of all money which has been conjured up only coveres the valoe of the loans, not the added interests.
To pay the interests more money has to be conjured up via new loans, and so on
Inevitably leading to someone not being able to pay back their loan.
I don't know if the above is true since money is all make believe to begin with.
Supposedly money represent the value of stuff in the world in some way. Not sure if it actually does, but still, if people accept that money has value then in some roundabout way they have also accepted that it was ok to create that money.
There is not a fixed amount of money in the world, there is as much money in the world as we collectivly make believe there is
A lot of people have argued that since there is a limited supply of resources in the world there is a limit to the value of all stuff in the world and therefore you cannot increase the amount of money in the world indefinitely (it represents the value of stuff after all) because you would run out of resources.
But does this make sense? Stuff don't have a fixed value either. The value of stuff is only that which people are willing to pay for it.
If you have an old chair it might have decreased in value because it is old an worn, or it might have increased in value because it is a rare specimin.
So
1) with the current system it it possible to repay all loans. Why/why not?
2) If it is possible how likely is it that only the really stupid people who obviously take out loans they never should have taken out will be the only ones who cannot pay back their loans?
3) Even if it is theoretically possible for a banking system of the type we have now to work, is the system being run so irresponsibly that it just won't work in the long run?
