interesting though all of your personal finances are... you seem to take a lot for granted that is actually inextricably linked to our system of debt and interest.
#1- you are expecting everyone to personally know and invest in the businesses of people they can trust to voluntarily provide them with dividends from their investments- this is outrageous!!! it would totally perpetuate the system of networking and personal connections that already creates an elite in the US, and the US/EU as a whole as an elite separate from the developing world.
The point of loans and interest and the accompanying laws is to advance capital to the individuals/businesses most able to use it to create the most value for society. If an individual/business is stupid enough to throw away the money on consumption rather than investments (exchanging money for whatever you expect to create more money in the future), well then I guess it's hard to say who's at fault- the recipient of the loan for not investing in something that will generate income to pay it back, or the loaner who loaned without realizing that the money would be consumed instead of invested...
I think both are culpable, you want to discourage both wasteful lending and wasteful borrowing- unfortunately due to lobbyists->laws I think we lean too hard on the borrowers (usually poor) to benefit the loaners (the rich); but I don't think you can say either is innocent!
#2- You speak as if people have a right to unlimited money. But money is just a medium of exchange for general value to society- you seem to imply that people should be allowed to take and take without ever being required to give back. The point of loans is to allow someone to take in advance in anticipation of giving back in the future, and someone else to give in anticipation of taking in the future (i.e. retirement, to store future inheritences, generally because they know someone else can use the money more efficiently than they can at that time). If you allow everyone to take without giving back, well then everyone will rationally take all they can and give nothing back and soon there will be nothing of value at all!
The success of capitalism rests upon the fact that to be wealthy/powerful you have to create value (at least in theory/general- duh the system isn't perfect, and we need regulation to try to improve on market failures such as health care).
#3- The point of money is to provide a medium of exchange. To speak of money as if it has some inherent value is to assume zero-sum thinking- to assume there is only a finite amount of value that can be created and exchanged. The money supply should in theory expand in tandem with the expansion of value created by society. If it expands too fast, as it has tended to do, there is inflation- a unit of money becomes worth less and less units of value; otoh if it expands too slowly (relative to expansion of value), a unit of money becomes worth more and more units of value (deflation- also a bad thing).
It is difficult to directly create money when/where value is created, so we try to set up systems like the Fed to indirectly create/inject money as it is justified by the economy. I agree the Fed is far from perfect, but the basic premise- releasing money into the economy while monitoring feedback (inflation), makes a lot of sense.
#4- Taxes and government spending: you speak as if they aren't linked- which is false, despite what Bush and Reagan liked to pretend. National debt is in theory no different than personal/corporate debt- it should be taken on to invest for future earnings, not taken on to fund wasteful consumption. A deficit makes sense if the deficit is being spent on things that will pay taxes with interest in the future- building education, health care, infrastructure, rule-of-law/justice, funding basic scientific research, balancing irrational market fears (i.e. New Deal spending), even caring for the environment (to an extent)- things that promote sustainable economic growth. A deficit makes no sense when it is being wasted on further destruction (Iraq...), not invested at all; yet the public doesn't seem to make the proper distinction...
Taxes are necessary to fund government spending; some level of government spending is certainly in the average citizen's best interest- to pay for police and a judicial system, to build infrastructure, to educate all children (future workers)... the edges can be debated, the extent of government responsibility can be debated (healthcare? welfare? social security? "defense" policy?), but the basic fact that government must collect money from citizens to pay for projects of general concern is indisputable.
The next question is how to equitably and efficiently collect the money? We say the rich should pay the most- and in the US they do, by far- percentage as well as absolute dollars... Yet we also say that we should tax things that are a net drain on society (consumption) rather than taxing things of benefit to society (work/investment), since taxation reduces the incentive for whatever action is being taxed- but sales taxes are regressive! I do agree the tax code has all sorts of egregious special interest rules, but I don't have a simple answer to fix the tension between efficient and fair taxation and I doubt you do either.
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