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Whether money or debt is 'just a number in a computer' or not is besides the point. We built the system that way deliberately because bartering is not efficient

Whether money or debt is 'just a number in a computer' or not is besides the point. We built the system that way deliberately because bartering is not efficient, doesn't scale, and doesn't easily allow creating debt that needs to be settled in the future. What we ended up with is a situation where almost all the wealth/value we (governments, businesses, the people) have built is represented in terms of 'monetary units' (the numbers in the computer), but it's increasingly clear that in the future, these positive and negative numbers will never add up to zero anymore, and we're not going to 'grow our economies out of debt' as was originally the idea of taking on debt now to invest in the future. This means someone is going to lose big time sooner or later. Printing more money to take some negative numbers from the economy and infusing it with some positive numbers is not a strategy that can save the system in the long term as there are exponential terms involved because of interest. There will be a point where diluting the the money supply (which is exactly what QE is) will result in a loss of confidence people have in the 'numbers in the computer' being a reliable proxy for their wealth. Governments will have a hard time selling treasuries when no-one expects them to have any value in the future. When that happens (which IMO is just a matter of time, how much time is not clear but most definitely not 100+ years) all value that is not recorded in tangible, useful assets or skills will simply disappear, and it will not just mean the 'numbers of the computer' have to be adjusted or reset and everything can go back to normal...

RobertoG 6y ago
>>" [..] We built the system that way deliberately because bartering is not efficient" Not really, the history of money doesn't support that theory. >>"[..] it's increasingly clear that in the future, these positive and negative numbers will never add up to zero anymore," They don't add already, never were suppose to add. Where is the dollar coming from if not the deficits of government? The spending of money in the economy is what creates money. So, it's the debt of the public sector what create the money in the first place. You are complaining that excessive deficits are creating too much money, so you already agree with that. >>"[..] Governments will have a hard time selling treasuries when no-one expects them to have any value in the future. " That makes zero sense. The Central Banks can, and frequently do, determine the interest of the public bonds. Japan is the main example, but there are many others. >>"[..] all value that is not recorded in tangible, useful assets or [..]" A government tax every transaction in the economy, and can do it because it has the monopoly of force in that country. If the USA government only accept dollars for paying taxes, there will be always (while there is an economy and they keep the monopoly of force) demand for the Dollar. The same is true for all the other countries.

RobertoG 6y ago

>>" [..] We built the system that way deliberately because bartering is not efficient" Not really, the history of money doesn't support that theory. >>"[..] it's increasingly clear that in the future, these positive and negative numbers will never add up to zero anymore," They don't add already, never were suppose to add. Where is the dollar coming from if not the deficits of government? The spending of money in the economy is what creates money. So, it's the debt of the public sector what create the money in the first place. You are complaining that excessive deficits are creating too much money, so you already agree with that. >>"[..] Governments will have a hard time selling treasuries when no-one expects them to have any value in the future. " That makes zero sense. The Central Banks can, and frequently do, determine the interest of the public bonds. Japan is the main example, but there are many others. >>"[..] all value that is not recorded in tangible, useful assets or [..]" A government tax every transaction in the economy, and can do it because it has the monopoly of force in that country. If the USA government only accept dollars for paying taxes, there will be always (while there is an economy and they keep the monopoly of force) demand for the Dollar. The same is true for all the other countries.