Essay on The Fake Economic Empire

Submitted By MollyMarko88
Words: 1056
Pages: 5

The Fake Economic Empire

An end which requires unjustified means is no justifiable end.
-Karl Marx

For the sake of this particular argument, it is not necessary to go over the whole process of modern money mechanics, for entire books have been written on such topics, including one particular document of the same name, which is still used today. Fractional reserve banking needs not be emphasized in terms of complex mathematical figures and economic jargon. It can rather be broken down into more digestible terms as follows. Say the government needs more money for their budget, like 1.3 billion. They might go to the Federal Reserve and ask for some fancy paper documents (called Federal Reserve notes) signifying equal value to the sum of 1.3 billion U.S. Dollars. At this point, the Federal Reserve would ask for 1.3 billion dollars worth of government bonds from the government. Then they would agree to print up some fancy paper ourselves, called government bonds. This implies that all the money we create eventually has to be paid back, for it never actually existed. Therefore, the amount of money supply must relatively coincide with the amount of money owed to someone by someone else. Money is debt. Hence, every dollar in your bank account is actually someone else's liability, and was never really the bank's money to loan you in the first place, resulting in all kinds of further implications we will not discuss at this time. Furthermore, it is interesting to note that if every single debt on this planet were paid in full, there would not be a single penny in circulation. Karl Beitel is a researcher at the American Federation of Teachers in San Francisco, and summarizes the current state of affairs as follows:
It is impossible to deny that the years since 1982 have seen significant improvement in US economic performance along a range of key indicators... At the same time, the improvement in profitability has not translated into a corollary increase in the level of private investment-demand. In the absence of the restoration of a higher rate of accumulation, insuring an adequate rate of growth of effective demand has become dependent on borrowing by the governmental and household sectors to finance current consumption. As a result, debt-obligations have risen at a rate that far exceeds the growth of real income or the rate of accumulation... Falling profitability will, in turn, require a prolonged period of debt and equity-deflation to correct the structural imbalances that have built up over the course of the prior profit-rate upswing, with an uncertain long-term outcome. (67) This brain-freezing conundrum speaks testament to society, as well as its role of shaping the human mind. It almost makes you begin to question reality, and subsequently wonder if you really are losing your mind. Nothing is something? Of course, not all of the answers have yet been made clear, but this debt ceiling has got to close otherwise we are doomed to fail, as a society, and as a major-league world power and influence. The human psyche model cannot exist on a framework which defies logic, that perpetually and systematically wastes finite resources in the vested interests of profit and corporate profiteering. If the amount of 'obligated' debts of other entities is truly what drives the primary currency of the world, than we truly are living in a fake empire. However, what I am proposing is an intrinsic shift in the views which are the primary cause of this fractional reserve proliferation. Over-leveraging and structural imbalances fashion such an intriguing paradox. If one were to examine these issues in a totally unapologetic manner, it might shed light on a potential interpretation which contrasts conventional wisdom. After all, unregulated abundance of money is truly characterized by the primary concern of over-leveraging, in turn reinforcing property bubbles and other socio-political issues. Kristijan Kortarski writes in…