There have been attempts to remove debt as the foundation of our financial system. Social Credit was one attempt.
The advantage of debt is it forces discipline of the financial system with respect to currency and maintains some semblance of stored value in the monetary system. The disadvantage is it places an implicit tax on productive enterprise through interest.
Simply printing and distributing money would almost definitely lead to unbridled inflation, and disarm government's ability to limit the amount of money in the system. However the ability to print money under a rigorous system of controlling the money supply with respect to productive output is superior to borrowing.
There is an argument that a nation should Never borrow money from private sources. And should only borrow from other Cental Banks on the basis of facilitating the import of foreign tade for defined periods and payed down through exports, enforcing a strict balance of trade. It is through this that exchange rates should be set and governed.
It is the sovereign national prerogative to inject money into the economy at affordable rates of interest to facilitate industrial and economic production and development. This validates the increase of money with a corresponding increase of physical product. It is further regulated through taxation and government spending.. all aimed at full employment and equitable distribution of wealth.
What has happened in Greece is an example is when borrowing becomes unhinged from the national currency and put in the hands of supranational agencies. This is a disaster and untenable even in the medium term.
The world's financial system has been denationalized, is saturated with debt at the same time the currencies have lost real relationship with physical product. That means debt will start to accumulate on a geometrical scale.
This abstraction of species of exchange means that the global economy will careen from crisis to crisis.. shock to shock.. and will collapse inevitably.. bringing on an Depression of unknown depth and duration. But it will be unlike anything we have seen before.
We now have a system, under global free market capitalism that is run solely for the benefit of banks and markets and have lost all semblance of a relationship to the real economy of industry, manufacturing and agriculture.
