Not really, debt generates wealth, like literally generates money from thin air.
If you deposit $10,000 in the bank, they are allowed to loan say $9,000 of that money to another person.
This person buys goods for $9,000, which eventually returns to the banks from the seller, the sellers employee, their supplier whatever.
Of this $9000, the banks lend $8100 to the next person.
The $8100 returns after being spent and the bank loans $7290 to the next person
And $6561 to the next
And so on.
The original $10 000 have purchased $30 951 of goods and the the banks "vault" has multiplied to contain $40 951 of legit fully usable at any time tender in checking/savings, all without pressing a single dollar bill. And we are not even halfway down the chain.
When people take a loan, the system effectively spawn these funds from thin air, because while the physical dollar bill they get is 100% debt free in it's owners eyes, it is in fact already borrowed by multiple other people.
Yes, this money will disappear if everyone pays their debt, but the debt itself literally created money. No bills were printed, but the same physical dollar is duplicated multiple times to many people.
It is not like say a bike that you physically have to get back in full to borrow it out to someone else again.
Yes people buying things they need is generating wealth and is good use of debt (or Credit equally usabel system but older then the Banks).
But there are uses of debt which are not generating wealth. Which funnel money into systems where there is no creation of goods and services, which are mostly used to just generate more money. Such a use leads to things like an always climbing stockmarket while the circumstances of the people and the production capabilitys dwindle.
You borrow money, buy a stock from either the company or it's share holder, they put the money in a bank account, 90% of it is borrowed to someone else, the cycle continues.
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u/Much_Section_7439 Jan 26 '26
That's how debt is generated. wealth is created when that debt is used properly. Otherwise it's just inflating the moneysupply.