Neil Adam Collins There should be a distinction made between the debt of $3 that you lend to your friend and the debt that involves banks, corporations and nations. These 2 kinds are totally and completely different.
It is pretty typical for capitalists, free market types and libertarians to try to justify the one, by bringing up the other. It has been seen over and over, the most common example being the tendency to use some truncated example of "muh daughter's lemonade stand" to explain any and every economic theory in favor of the 'free market'.
One of the important differences between 'debt' (the $3 kind) and 'debt' (banking) is that you probably had to work for the $3 you loan to your friend, not to mention that you no longer have that $3 while it is in your friend's pocket.... while on the other hand, this is not how it works with debt from banks. They create the money from thin-air when they loan it to you and so-on. I suppose this business of scamming people for 6-10 hours a day (banking) can be called 'work' but then thieves sometimes break a sweat also, and we usually don't call it labor.
"This study establishes for the first time empirically that banks individually create money out of nothing. The money supply is created as ‘fairy dust’ produced by the banks individually, "out of thin air"."
Can banks individually create money out of nothing? — The theories and the empirical evidence....
article, abstract and read online here:
http://www.sciencedirect.com/.../pii/S1057521914001070
