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Does the Austrian school criticise a debt based money system

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inquisitiveteenager posted on Tue, Jul 21 2009 8:51 AM

 

The one we have when you go to a bank you get credit, which is money loaned into existence when you

borrow it.

The Federal Reserve Money Mechanics pdf says that banks create loans out of thin air when someone

borrows money.

Do Austrian economists say anything about this system?

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We do not have a "debt based money system," so there is nothing to criticize. The Fed expands the money supply by monetizing debt, not by loaning it into existence. The discount window is rarely used in monetary policy these days.

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DD5 replied on Tue, Jul 21 2009 9:55 AM

It’s at the heart of the Austrian Business Cycle theory, but I would agree with Krazy Kaju that this whole "money as debt" is a mischaracterization.

Be cautious of all the “money as debt” or “web of debt”, or “money masters” or whatever is out there using fallacious economic theories to explain all of this.

 

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mash replied on Tue, Jul 21 2009 8:39 PM

Inquisitiveteenager,

I notice that several of the threads you have made are along these same lines. Do you mind linking to a source where these ideas are coming from?

 

DD5:

Be cautious of all the “money as debt” or “web of debt”, or “money masters” or whatever is out there using fallacious economic theories to explain all of this.

 


Could you please elaborate what you mean by this. Specifically, what are the main arguments for 'money as debt' and what 'fallacious economic theories' are they using?

 

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