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"Define "economy grows", please" Well, there are two things that have to grow. The money supply has to grow in order to create enough money to pay back existing loans. If the money supply does not grow, The interest rate will instead become the default rate, and risk sending the economy into a downward spiral. Also, the real economy
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Ok, here's the short version of my question: If the total economy does not grow, how can interest be paid on loans? If interest cannot be paid on loans, but the money supply is based on debt, then does not a period of zero growth threaten not only large-scale bankruptcy because most loans become mathematically impossible to pay, but also threaten
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@ z1235 Sure, but some amount of risk is prudent while others are just gambling. Commuting to work in the morning involves a prudent risk - riding a bike to work in midtown Manhattan during rush hour with no helmet or health insurance is gambling - a bad risk/reward ratio. In a growing economy, taking out a loan to achieve an economic goal is often
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@ bbnet Well, savings are crucial as is deferring spending, I won't disagree about that. However, no banks I know of are offering 7% returns right now, however. The highest my personal bank offers is 0.45% right now, and that's if you have a ton of money in a money-market account. I suppose my question is what happens in a money-system like
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@ Andris Birkmanis In your scenario, $1100 is owed back to the lender, and $1100 actually exists at time of lending. In our current money system, if you were to add all debt owed total in the economy and compared it to all money currently existing, debt owed would be larger than the money existing by about the interest rate. When banks loan money, money
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@ bbnet Ok, but let's say I make a lot of profit selling 1 widget a day, and instead of saving anything I just use part of the income to hire the inventor. Then the same thing would happen without anyone saving anything. What's most important is the work gets done to produce the widgets... Or, let's say I save all of the profits from making
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I'm not sure I follow as to how savings can create wealth. On the contrary, I would think that work, either done by humans or machines, is the only thing which can produce wealth. Savings are mainly useful for accessing or organizing the products or proceses of work.
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n 2011, almost all money used in the West is based on debt-with-interest. What effects can we expect this to have if for some reason (for example peak oil/resources, war or natural disasters) the economy ceases to grow on a per-capita basis? Debt creates a kind of imperative for growth in the economy - growth in both the quantity of money and the quantity
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False dichotomy. I don't disagree with you.
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Another glaring oversight seems to be the sea wall in front of the plant itself. Judging from satelite photos, and the tsunami damage, it seems to have been designed for deflecting high seas or high tide, not a tsunami - which is bizzarre. There have been 195 recorded tsunamis in Japan. I assume the reason is that it was cheaper therefore more profitable