Summary of Money as Debt Essay

Entering into the twentieth century, Americans usually only made bigger purchases if they had the total amount of money ready to be used all at one time. Once the idea of credit became popular, Americans started to make those purchases sooner and they only had to pay back the money small amounts at a time. This method of spending raised the standard of living in America while also raising the level of debt. It took off from there, people became hooked on being able to pay small amounts of a big purchase in increments instead of one lump sum. Government programs also started accumulating debt of their own. Eventually, the United States was racking up debt into several

Now, let’s look back into history to see how this system developed. Goldsmiths were considered the first bankers because they started storing people’s gold in their vaults. The first paper money was only a receipt for gold left with the goldsmith. Paper money caught on because it was easier than lugging around heavy gold and silver coins. In time, the goldsmiths came to realize that only a handful of people ever came in to claim their gold at any given time, so they started cheating the system. They learned that they could print more money than they had gold and typically no one noticed. They could then loan out this extra money and collect interest on it. This was the birth of “Fractional Reserve Lending”, or FRL.

The National Debt started a long time ago when the U.S started the revolutionary war. It started in 1835 and went from there and our debt is rising till today. Our debt is predicted to be about 300,000,000 trillion dollars. The debt from September 2 was about 17 trillion it is rising very fast and when it gets too high the U.S will start losing products like Oil that we need for cars and other fuel working products. Our U.S. is one of the most highest in debt out of the whole world China is about 6 trillion, just an estimation, Africa is about 1 trillion, and Russia area is 8 trillion. $56,006 for every person living in the US. $145,950 for every household in the US. 103% of the U.S. gross domestic product. 540% of annual federal revenues.

There is nothing as influential and powerful as the concept of money. As a medium for exchange, money is value given or received in exchange for anything of value. Because money stands in place for value, why is it that gold has been the scale for evaluating money throughout history? Ted Cruz, in a Republican Presidential Debate, answered a question regarding monetary policy. He thinks “the Fed should get out of the business of trying to juice our economy and simply be focused on sound money and monetary stability, ideally tied to gold” (Cruz 2015). Cruz aligns “sound money” to gold because gold stabilizes pricing and reduces inflation percentages over the long run. The problem with

For as long as money has existed, governments have sought to control its supply for their own benefit. The ancient Romans, for instance, regularly debased their coins so that, by the end of the 3rd century AD, the actual content of silver had declined to less than 5% purity. The debasement of and inflation of the money supply has historically been a tool of governments to expand their power. In conventional economics, which this paper will assume as a positive background in defending the feasibility of a sound money amendment, the result is a redistribution of real wealth from savers to the government, the banking and finance system, and other

Being a good steward over our finances is challenging at times. In spite of living in a prosperous nation and even holding down a successful job, the amount of debt we acquire is often out of control.

The Gold Standard is a monetary system that links currency to the value of gold. Currency cannot be increased, without increasing the supply of their gold reserve. Essentially this would level out the monetary system, and allows for an economy to live within their means. Mind you, Gold supply is rare and cannot be imitated, therefore the supply grows slowly, allowing the government to reduce overspending and keep inflations under control. Under the Gold standard the monetary system is defined by a certain amount of gold, as oppose to fiat money, in which the dollar is backed by the government’s word, and is not linked to any particular asset. Historically commercial banks were very reliable in providing gold monetary exchanges. It is because of these banks, that people did not have to carry around a ton of gold coins. However, it did allow people to deposit cash and banks were obliged to redeem it for gold.

This is a problem because now the banks have little incentive to give people loans that they can pay back. So they will just give them higher loans, because if they can’t pay them back, the bank doesn’t get hurt. Whoever originally gives out the money must be held accountable for its repayment; otherwise there is a serious conflict of interest.

The one item that people obsess about day in and day out is money. Our currency runs the world and the choices we make. However, before the standard federal reserve notes, gold was used in exchange for goods. The gold standard was created, but then it was abandoned; it is still debated today whether or not the gold standard will ever return.

In the United States banks operate under the Fractional Reserve System. This means that the law requires banks to keep a percentage of their deposits as reserves in the form of vault cash or as deposits with the nearest Federal Reserve Bank. They loaned out the rest of their deposits to earn interest. Such banking practices formed the basis for the banking system's ability to "create" money. I think one of the important benefits of fractional reserve banking is it pools together a lot of smaller savings, and it's able to lend it out in a variety of markets, some of them to big business but also to smaller enterprise and to households—institutions that banks,

Why is personal debt such a huge problem for so many of us? The solution is not simple and can seem like it is impossible to find. The reason for this is simply because we are all different in the way we think, feel and address issues in our lives.

However, the issue with Martin’s conclusion is that he fails to support his claim that money was truly accepted as credit among more than just a few. His evidence better defends the position that money has always operated like transferable credit. Martin does point to a few scholars that agreed with him, like Lowndes and Law, but these were revolutionary ideas and were either rejected or their plans failed miserably. By accidentally defending the position that money operates like credit so well, while neglected other major parts of his thesis, Martin undermines it and draws the reader’s attention in another

Early men’s didn’t need money. They found their own cloth, food, and shelter by what they could find in their environment and, that caused some issues because, people don’t always have what they want so, from here people started exchanging goods and that is called the barter system. After long time of using the useful barter system, money was invented so, people started using it instead of the barter system. When money was available a group of men appeared and they are called moneylenders and this led to the concept of creating banks. In the past, banks had two functions. The first function is to take deposits from people and keep it with them until they need them. The second function is to give loans to people. The economy won’t be able

The reasons why your debt is growing can be vast. However, ever situation can and will be different for everyone. If you’re serious about solving this dilemma, you must find out and correct the reasons in which you’re going deeper and deeper in debt. Only then can you start your journey to financial freedom and living a life without worrying about how or if you can pay your bills. Imagine how amazing your life would be if your debt was gone or at least manageable. If this concept sounds great, then we will discuss some of the top reason why your debt is growing in detail below.

It is important to define the term gold standard before going any further. A gold standard means that the price of a currency is fixed to a certain amount of gold (CMI). Under a gold standard, the government can only print four times as many paper bills equal to their amount of gold. It is also important to define the term fiat currency. Fiat currency is a currency system that has no physical backing, but instead is backed by the full faith and credit of the government. Before the original thirteen colonies ever declared independence, they used foreign currencies or some paper bills printed by the local governments (Sylla). The foreign coins used were all made of their assigned value in precious metals. When the Revolutionary War broke out, the Congress began producing their own currency, called Continentals. The Continental rapidly lost its value, and by the end of the war was not even used as currency by the American people. After this, the new country had no banks of her own until 1781. In a letter written by Alexander Hamilton, he stated that "Most commercial nations have found it necessary to institute banks and they have proved to be the happiest engines that ever were invented for advancing trade" (qtd. in Sylla). While three banks had opened up between then and George Washington becoming the first president, they merely served their surrounding areas. A banking system similar to what is in place