Capitalistic Renaissance     8: Debt hijacking capitalism

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Left without balance, the hybrid bank corporations are hijacking capitalism with unprecedented debt. This debt is threatening the very foundation of economics.

Normally when consumers are purchasing things from generic public corporations i.e. cars, shoes, gold, food, etcetera, the things purchased can go up or down in value for the consumers. This fluctuation in value depends on the supply of the raw physical materials.

When consumers are acquiring debt disguised as free credit from banks, the interest on the credit always decreases the value to consumers and eventually surpasses their fixed incomes. This happens because the interest increases the size of the debt with the biggest increases taking effect when the earliest or first payments are made.

Today many people and countries face this problem where the debt servicing or the ability to repay the debt as a percentage of income is greater than one hundred percent. In simpler terms, many people and countries owe more than they earn.

In most cases the suppressive effects of increasing debt on fixed incomes are known in advance, but are masked by greed and not the enlightened driving force of pure capitalism as a social good.

Go to Section 9: What happened?