cross-posted from: https://lemmy.world/post/50413218

YSK this because the high amount of public debt, which has been getting a lot of attention in the US, is actually by design.

In our double-entry bookkeeping system, money is created via bank lending and government spending, adding to the economy, and is destroyed via loan repayments and taxes, subtracting from the economy.

Central banks create a wealth pump mechanism into assets through money printing, which erodes consumer purchasing power, driven by deficit spending, which creates money for the private sector.

Profits are privatized; losses are socialized.

• https://link.springer.com/article/10.1007/s11625-023-01304-5
• https://www.bankofengland.co.uk/quarterly-bulletin/2014/q1/money-creation-in-the-modern-economy