It creates artificial money on paper and the gap between actual monetary assets and total wealth accounting widen everytime until debt write-off. This results in poor economy everywhere at different times. Instead, debt should have an ownership split ratio as a factor of repayment.
Well... Money is just a certificate that encapsulates the information indicating that I have done this amount of work and then I can exchange this amount of work for another amount of work such as building houses, cars, etc. But when the Fed prints money out of thin air WITHOUT justifying the money (certificates) with actual work going into it then yeah...
The interest rate is the cost for acquiring the principal now. You can think of debt as pulling money from the future, and making it available in the present. The price of this wizardry is the interest rate — after all, wizards gotta eat too!
OP’s observation is a feature not a bug
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You should look up debt vs equity 101.
Yup! Equity is ownership split