The present debt-based financial system has no shortage of apologists. But when confronted with the facts of the private production of debt-money, they're left in an unfortunate position: they haven't got a leg to stand on. Their only refuge is financial fearmongering, declaring that public finance would be "inflationary". What are they talking about? Let's have a closer look.
When decrying government production of money in the public interest, the fearmongers invoke the spectre of inflation, i.e. rising prices. But is this such a bad thing? It can be argued that society is addicted to price inflation. Who doesn't enjoy watching the selling price of their home go up far above what they paid for it? This inflation is welcomed, and not just by the homeowner. The private banks, who fuel the inflation with their debt-money produced "out of thin air" for larger and larger mortgages, love the increased numbers in their debt portfolios, as do their shareholders who want price inflation of the bank's stock.
The financial fearmongers rarely make the crucial connection between inflation and interest-bearing debt-money. Indeed, interest on debt-money is the primary cause of inflation. In her book, "Interest and Inflation Free Money, Creating an Exchange Medium that Works for Everybody and Protects the Earth (1987), Margrit Kennedy calculated that 40% of a price is due to interest. Imagine that. And yet we have professional economists warning us against inflation while defending the very system that produces it. In the last hundred years, privately produced debt-money has lost over 95% of its purchasing power, a damning fact if ever there was one.
The fearmongers can only get away with this nonsense because of public ignorance about where money comes from. If the public knew the truth about private banking and the brutal effects of all this debt-money on our society, the fears would disappear. Only the government should produce our nation's money, no bonds, no borrowing, no debt. Inflation would then be strictly controlled and existing debts could be paid and then finally eliminated, and this would also bring a welcome end to financial fearmongering.