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When it comes to moving money, there are only three fundamental mechanisms: gift, debt and theft.
If Alfred voluntarily gives $1,000 to Donna without receiving Donna’s promise to repay, the transaction is a gift.
If Alfred gives $1,000 to Donna, and Donna reciprocates by providing Alfred with her promise to repay that $1,000 (perhaps with interest), that transaction is a debt.
If Donna takes $1,000 from Alfred without Alfred’s consent and without providing Alfred with Donna’s promise to repay, that’s theft.
Americans live in a “debt-based” economy. There is no gold or silver coin (real money) in circulation. As a result, our fiat currency is loaned into circulation and necessarily debt-based.
The essence of every debt is a promise to repay. The essence of every nation’s debt-based monetary system is that nation’s ability to make good on their promises to repay their debts—and determination to do so.
