[kimchi]

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If it is the government who give banks permission to do this, then why don't they just give themselves permission to do it, create the money themselves, and not pay interest?

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Is that what Germany did after WWI with such great success that in the end you needed a wheelbarrow full of money to buy a loaf of bread?

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How is it different if the governement borrows created money from banks and pays interest instead of money it creates itself and doesn't pay interest?

Same result, cheaper method.