# Where does money go in a recession?

**URL:** <https://boards.straightdope.com/t/where-does-money-go-in-a-recession/478331>\
**Category:** Factual Questions\
**Created:** [December 22, 2008, 5:28pm UTC](https://boards.straightdope.com/t/where-does-money-go-in-a-recession/478331 "2008-12-22T17:28:41Z")\
**Posts on this page:** 3\
**Page:** 4

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**Author:** ![septimus](https://sea3.discourse-cdn.com/straightdope/user_avatar/boards.straightdope.com/septimus/32/410_2.png) [@septimus](https://boards.straightdope.com/u/septimus)\
**Post date:** [October 22, 2012, 12:20pm UTC](https://boards.straightdope.com/t/where-does-money-go-in-a-recession/478331/61 "2012-10-22T12:20:09Z")

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> [@Mijin](#):
>
> They are simply conjuring money at will, so it doesn’t even matter to them if I can’t pay them back.

😕 😕 😕 :smack:

Mijin gets a checking account, cashier’s check or line of credit for $100 million dollars, spends it all on hookers and blow, but the hookers and blow dealers present the check(s) for payment and the bank, under banking rules, is obligated to redeem.

If we were in BBQ Pit I’d write “What!!? Is this a contest to see whose understanding of simple banking is the most confused ?”

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**Author:** ![Mijin](https://sea3.discourse-cdn.com/straightdope/user_avatar/boards.straightdope.com/mijin/32/9369_2.png) [@Mijin](https://boards.straightdope.com/u/Mijin)\
**Post date:** [October 22, 2012, 3:07pm UTC](https://boards.straightdope.com/t/where-does-money-go-in-a-recession/478331/62 "2012-10-22T15:07:35Z")

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> [@septimus](#):
>
> 😕 😕 😕 :smack:
> 
> Mijin gets a checking account, cashier’s check or line of credit for $100 million dollars, spends it all on hookers and blow, but the hookers and blow dealers present the check(s) for payment and the bank, under banking rules, is obligated to redeem.

Exactly. Remember you are the one who has said that commercial banks create money, and furthermore that they don’t need to back it with anything, not I. A hundred emoticons won’t change that.

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**Author:** ![septimus](https://sea3.discourse-cdn.com/straightdope/user_avatar/boards.straightdope.com/septimus/32/410_2.png) [@septimus](https://boards.straightdope.com/u/septimus)\
**Post date:** [October 22, 2012, 4:19pm UTC](https://boards.straightdope.com/t/where-does-money-go-in-a-recession/478331/63 "2012-10-22T16:19:39Z")

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> [@Mijin](#):
>
> Exactly. Remember you are the one who has said that commercial banks create money, and furthermore that they don’t need to back it with anything, not I. A hundred emoticons won’t change that.

Fine. I realized as I was replying that yours was intended as some _reductio ad absurdem_. Problem is, you’re debating a strawman of your own design.

Where did I write “they don’t need to back it with anything”? … And even if you infer that possibility (e.g. from my apple IOU analogy) _what does it have to do with the question under debate_?

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