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Comment by ENTP | Hacker News Reader

Could this be a reflection of our monetary system (the fact that we cannot possibly repay all the money because there is interest that is owed to the lenders, and where does that extra interest come from? The lenders!)? This means we need more people to earn more money to pay it back ad nauseum leading to an exponential problem? I'm not an economic expert but believe the basis of the above is rooted in reality but happy to learn more if someone can correct me!

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No. The error that you have made is confusing stocks with flows. Your problem would be true under two circumstances - if all debts had to be paid at once, or if money disappeared when spent.

But when you introduce the time dimension, the system works. The money supply is a 'stock' of some quantity, but payments (principal and interest) occur over time, making them a 'flow'. Those payments will then generally be spent back into the system, which circulates (all expenditure is someone else's income). This circulation is measured as the 'velocity of money'.

So interest isn't a problem ultimately, but the increasing accumulation of wealth by the most wealthy may become more and more of an issue.

That's only true if the interest payment is larger than the income that can be made available to pay it.

If you live in Greece then, yes, this is a bit of an issue. The solution there is likely to be some form of writing down of the debt.

what you described is essentially a global ponzie scheme. and that's what it is at the bottom line - the growth feeds on itself - no more growth - everything crashes.

is that sustainable or even reasonable by any standard - the answer is an obvious "no". but it benefits the powerful.

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