How is new money generated?
In: 17
There’s a lot of nonsense here. The government doesnt literally print enough money to meaningfully change the money supply. Money is primarily created through debt. It works something like this:
I have money, and you want money (say, to start a lemonade stand). Since you don’t have the money, but it’ll let you make more money in the future, you are willing to take a loan from me, and I’m willing to loan to you. You ask for $100 and i ask for $110 back in one year. So we make the deal, you get the money, and I get an IOU for $110.
This is the crucial bit, you started with $0, I started with $100. In one year, I’ll have $110. That extra $10 got created *as money* through the loan. The actual *value* got created by the labor you put into your lemonade stand.
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