Debtor Nations

In the eye-opening short film Money As Debt, filmmaker Paul Grignon explores important questions about the current state of money and debt in the economic world. He makes a compelling argument that while money used to represent value in the form of gold or silver, or as a barter of goods and services, what money really represents in the current economic world is debt.  That's not only for individual citizens, but for our governments as well.

Grignon presents the remarkable fact that only about 5% of America's currency is created by the United States Mint in the form of printing physical money. The other 95% comes purely from bank loans; the money for the loan is created out of thin air when a loan agreement with a bank is signed. According to Grignon, the privately owned banks themselves produce the vast majority of our money—not the Mint. He argues that this system has produced an economic world in which everyone: individuals, corporations, and governments are all in perpetual debt to private banks.

Money as Debt proposes several possible solutions to this problem, offering some viable alternatives to our current financial structure. One suggestion is to return to a physical standard of money such as gold or silver. There are issues with this kind of metal-backed money standard, but the positive side would be that there would be a limited supply of money in circulation and no possibility for endless debt. Another idea is for people to create their own localized barter economy currencies, where the trades of goods and services more directly equate to hours of labor spent in the economy. Gringon also suggests that we could scrap the entire financial system and adopt a system of banking that would be run by non-profit companies, without the use of compounded interest and consequentially free of debt. This film is a must-watch for anyone interested in understanding the way that economics, banking, and the Federal Reserve actually works.

Tristan Gulliford is a writer, dreamer, and aspiring myth-keeper who makes electronic music under the name "Dreamcode". He is currently attending the University of Colorado at Boulder.

Image by greefus groinks, courtesy of Creative Commons license.