The Directional Flow of Money, and the Consequences of Debt

I suppose I am going to attempt to combine many different aspects of my knowledge into this post.  So what is difficult with this entry in particular, is to keep a sense of fluidity within the language.  In other words, when I attempt to bring in another set of knowledge, to not make the overall transition seem completely random.  As the title suggests, I am going to talk about the flow of money and what debt does to this whole equation.  It is in my view, that this produces a population who are enslaved.

“Nobody is more enslaved, than a slave who thinks they are free.”  – Author Unknown at this point

In order to really grasp the second half of this post, the consequences of debt, I am going to examine the consumerism society that we live in.  If India were to continue their growth rate, and were to meet the same consumption per capita as Americans, India alone would consume all of the world’s resources.  Now, there are so many avenues to take this.  (Intrinsic waste, over population, sustainability, etc.)  However, I am going to focus on how the large amounts of consumerism drives enslavement.

The constant bombardment of push and pull advertisements eventually creates a lot of people wanting all sorts of products and services.  If one were to buy this eyeliner, their beauty would be magnified ten fold.  Buy this product!  So on and so forth.  And well, this mentality, is the driving factor as to why so many people put themselves in debt, to essentially live outside of their means.

So to really capture this whole picture, where does all this money go?

If let’s say I get a paycheck from working a couple of weeks as a projectionist at a movie theater, (I was a projectionist for about two years) that money was spent on all sorts of goods and services, driving consumption and thus driving the economy.  I would buy a new video game, or, I would pay my cell phone bill.  Maybe, I would take a nice girl out to lunch, or buy some new music for my iPod.  The options were endless, and for the most part, I rarely saved my paycheck and I spent every dime.  Those products and services are owned by other companies, who pay other people, whereby they will consume with other companies.  In examining what exactly happens, let us take an extreme.  Let us presume everyone can buy everything with sheer cash.  Corporations would still receive profits, but two things would occur:

  1. “Growth” would not be as strong.  Leverage (the ratio of actual earnings to debt) allows for more resources to hopefully create a business that is solvent.  (Some do fail of course)
  2. Banks would not make money.  (Remember, banks make money by loaning out money and charging interest on the loan.  If from the very beginning banks just stored cash, there might be means to make more capital however it is safe to say profits would be substantially less.)

So in our real world, people not only have credit cards, but a very typical loan are educational or home loans.  And even though I have “federal” loans for my schooling, a private bank oversees the loan contract.  So, who really is responsible for these educational loans?  With the driving consumer market (I want that, and that, and that!) it is very tempting to get loans if not for particular products, for an education that would allow more buying power to get all the things one would want or desire.  So back to the example.  As people get paid, they pay other corporations, who pay other people, and intrinsically, even the CEO’s have debt (and even if a CEO does not, having a high credit score allows them the option for loans in the future).  Whether it be a home mortgage, car loan, educational loans, or a credit card, the debt basically moves the money from the economy to the hands of the banks (also keep in mind, banks have stocks in pretty much any major corporation on this planet).  As more and more debt is enacted on the populace, more and more percentage of the income of the average worker has to end up to the banks.  And so, I guess I can sum up my thought to this:

Money travels up the socioeconomic ladder, not down.

What is ingenious about this whole system, is that when I get a paycheck, or a bonus from my company, I have the very easy illusion or perceptiveness that this new money is mine.  This is somewhat accurate, but not completely.  Inevitably I will not only have to pay my debts, but I will purchase other products and services that help pay the debts of other people.  And well, all of that money essentially moves back to the banks.  (Credit card companies are owned by the banks.  And have you seen the credit consolidation companies on TV?  Well, they are owned by the credit card companies, which essentially means they are owned by the banks as well.)

So now, we have a population who thinks they are free but are really enslaved.  They are pushed to think they have to pay off all of their debts (to increase credit score [banks] and to fulfill the consumerism drive) and so people work jobs ranging from waiting at restaurants, to welding metal at construction sites.  And well, if one were to really think about it, in order to really enjoy a very lavish lifestyle, one needs a population that are willing to do those sort of things for you.  If I have trillions of dollars, what would it be worth if when I go to a sandwich shop I have to make the sandwich myself?  When I want a new iPad, I need not only someone to come up with the product but to be able to produce the product as well.  This intrinsically means people are needed for construction of the very facilities to produce such products.  I heard a quote from an economic philosopher, and I will never forget it even though I forgot his name.  If I remember correctly, he lived during the 1700’s.

“The rich always need to have a surplus of the poor.”  Why?  Because the poor are needed to do the jobs to sustain such a “high standard” of living.

If this whole model is analyzed, two things stick out in my opinion.  First, this system would not work if the population were not driven to consume at such a high rate.  Always having the need to consume more eventually pushes people to get into debt in some way, which therefore drives the whole system.  More debt, essentially means more money being electronically transferred to the big banks.  Secondly, I have noticed that never in my entire educational career, have I examined the fiscal or economic philosophies of the forefathers.  I know why now.  Jefferson and Abraham Lincoln (from the book Web of Debt) wanted to enact what was termed The Greenback.  The Greenback is a debtless currency that is controlled by The Government.  What is beautiful about this whole thing, is it incentifies both parties.  If I am a farmer let’s say, and I could use a loan from my government to expand my production, the government will issue me a loan.  Of course, I have to pay back interest.  Interest on these loans are a tax write off (because interest is essentially how the government gets paid) and if I have enough loans and am able to pay back certain amounts of interest, then I would not have to pay taxes at all.  This system also creates an incentive for the government to loan out money and smartly, because the more interest they receive the more money they have to do programs for the people.  Once Abraham Lincoln was about to get The Greenback passed, he was conveniently assassinated.  Many experts believe the true organization responsible for Lincoln’s death was the private banking sector.

Ultimately, this is not taught so that people do not see other possible ways to go about fiscal and monetary policy.  This inevitably creates a population that just keeps the existing system, depends on the system, and expects the system to work.  The whole while, money is being funneled to the private banking sector whereby they control everything, from the economy to political governments, to entire countries.  This whole time, people have this illusion that when they cash their check at their pay period, that money is theirs.  Ultimately, that money isn’t.  That money is eventually going to end up in the hands of the banks.  And well, if the rate of transactions is increased (electronic vs. physical money) the quicker the money ends up in the hands of the banks.

So, for the most part, humanity is enslaved while thinking they are free.  Quite ingenious actually;  but, immoral too.

As Rage Against the Machine eloquently puts it at the end of The Matrix, I pray from the bottom of my heart that humanity “Wake(s) Up”.

So what can humanity do to change the system?  As my father always has said, “Use the system to reform the system.”  The end goal, in my opinion, is to:

  1. Learn about or derive the various methods to go about having a national and or local economy.
  2. Abolish the private banking sector.

Of course, the details of those two points are so comprehensive I am not going to get into it.  Also, people would probably die.  I am not going to deny that.  But the deaths of people towards the cause of reforming a system that is responsible for poverty and enslavement, would be for a heroic cause.

“One is not living, until they have found something to die for.” – Dr. Martin Luther King Jr.

Their deaths would not only improve the lives of billions of people on this planet currently, their deaths would also improve the lives of future generations of humanity to come.


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