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> "Dollars are created via lending...." while this is somewhat true, i really dislike this perspective. dollars are created from--and first and foremost, repre
by clairity 8y ago
> "Dollars are created via lending...."
while this is somewhat true, i really dislike this perspective. dollars are created from--and first and foremost, represents--labor. whenever i work, i create something of value, and to trade that value for something else of value, i use money to abstract my labor into a uniform medium that is universally recognized and easily tradeable.
it is not some central bank granting me value via a loan, it's my labor granting value to the money.
- empath75 8y agoYou’re taking about wealth not currency.
- clairity 8y agono, i'm not. wealth is the accumulation of the value created by labor. for the wealthy, that means the accumulation of the fruits of other people's labor.
- tracker1 8y agoOr labor being more frugal and not spending every penny frivolously, then investing the difference.
- clairity 8y agowhat dynamics exist that this is the primary problem to address, rather than being able to generate spare cash to invest in the first place?
- tracker1 8y agoBy nearly every standard in the world, people in the United States are very wealthy. People in the U.S. also extend themselves into huge amounts of debt, most of which is avoidable. I'm not saying it's the primary problem, I'm pointing out that wealth isn't created solely on the backs of labor.
- clairity 8y agowe're talking about slightly different concepts. i'm referring to the federal reserve creating currency (which is a type of debt)--in theory, the fed was created to print precisely enough money to account for the value generated by our cumulative labor, so that we have that well-accepted paper medium to exchange with each other rather than having to barter for everything. you're talking about consumer debt, which still represents labor, but it's borrowed from others (or from the future). of course when you borrow to buy depreciating assets, that lowers your personal wealth (you're basically throwing away value). its interest that creates value from capital rather than labor, ostensibly as a reward for risk-taking, but also to account for the time value of money (and its cousin, inflation). this is why the wealthy care so much about interest rates.
- tracker1 8y agoSorry, I misread original comment I was replying to. I don't think we're at disagreement after re-reading the first part.