Shirley Goodbar’s Modern Economics article appearing in The Australian newspaper, March 2012:
Spending money one doesn’t have is an endemic disorder of modern society. Actually, it probably isn’t so modern. I think it may have started with the Egyptians several millennia BC. They built their entire economy with slaves they didn’t have to pay. Unfortunately, the slaves absconded taking their progeny with them, thus depriving the Egyptians of their future workforce.
The Egyptians panicked. The bottom had just fallen out of their economy. They should never have started building those pyramids—they were living beyond their means.
After quite a few more millennia someone invented lending banks, and the banks invented fractional-reserve lending. This was peachy; the local wage-slaves could now borrow money the banks didn’t have and pretend they weren’t slaves. They only had to go to the bank in person to ask for the money. The banks wrote the request in a leger, and the borrower could go out and spend the money the bank hadn’t given him, and pay the banker back with his wage money.
Eventually one cluey banker said, “Why are those grubby wage-slaves cluttering up our bank lobbies? It’s interfering with our golf games. Let’s give them a permanent chit they can use whenever they like.”
So, the bankers sent little plastic cards out to everyone and invited people to take all the money they wanted. Bank clerks became very busy writing numbers in legers to represent the money the chit-holders hadn’t been given. They also added a few extra notations to pay the clerks who were keeping track of everything in their legers, and the bankers who were playing golf.
A government Brain Trust (a ‘Trust’ is a place you put valuable things when they are not being used) decided the ‘economy’ needed to grow continuously forever. They forgot, though, (their brains were in a Trust, remember), that nothing grows forever.
When the ‘economy’ displayed its natural propensity, i.e. stopped growing, there was panic. (Remember the Egyptians?) What our wage-slaves think they own is really owned by the bankers who have it all written in their legers. The legers are kept in the vaults where the money that doesn’t exist is supposed to be. The bankers take their mortgaged houses back, but then can’t figure out what to do with empty houses that are no longer being paid for with non-existent money.
It would seem that, like the ancient Egyptians, we are living beyond our means. Obviously, the Government’s brains are not the only ones in a Trust.