Hypothetical economic system Opinions wanted

Discussion in 'Economics' started by slider123456, Jul 18, 2008.

  1. The problem with the current system can be logically inferred from points 1 and 2 of my previous post.


    Point 1 shows that without the mitigating factors of money coming in from another country through exporting goods or foreign loans there is a continually rising debt. The nature of this debt is that the existing population is carrying the interest of all previous generations minus the money imported from foreign countries through exports. Without some sort of free money such as loans from foreign countries or money coming in from exports this interest balance will continue to rise until it overrides the carrying capacity of the country. Loans from foreign countries only serve to hide this debt and delay the inevitable and the only true way to "keep up" is more and more exports to balance the deficiency.


    Point 2 is a variation of the same problem where there is not enough money in the country to buy the goods produced and inevitably has the same "solutions" which is either foreign debt or income through exportation to make up the difference. If these are not forthcoming products will sit on shelves and lead to lay-offs creating a spiral that lead to a depression.


    As long as there are incoming loans from foreign countries or enough income from exports these effects are not noticed but once that stops the inevitable result is collapse.
     
    #31     Jul 21, 2008