Author: Christopher Houghton Budd
Pages: 13
Originally published 2003

What is the deeper meaning of today’s high levels of personal, organisational and national debt? What is its true counter part? This paper argues that to understand modern debt we need to differentiate between borrowing to buy (consumer debt), productive investment (savings) and financing human creativity (education, the arts, innovation, etc.) through super-savings. For this, however, we need to be careful how we analyse debt-based money creation and look instead at the economic difference between trade and investment, circulating goods and creating new values. The first implies 0% interest, the second +/- %. The very different natures of the tangible (goods) and intangible (e.g. services) aspects of economic life need to be taken into account and use made of such ideas as ‘social seignorage’, ‘citizenised monetary policy’, and ‘net worth transfers’.