Debt or Commitment

Spending on LETS is different to spending ordinary money. It's perfectly OK to spend before you earn because:

• No interest is ever payable on LETS.
• Some accounts have to be in debit for the system to work.
• You increase the total amount of currency in circulation, stimulating extra local trade.
• You can demonstrate and explore the full potential of LETS as an interest free currency - not just a marginal benefit. You can eg:
  • build a house
  • set up a small business or cooperative
  • invest in appropriate technologies
  • invest in local production
• A debit on LETS is simply a commitment to repay the community at some time - in goods and services, of a similar value
• The fact that balances are known to the others is usually sufficient to encourage reciprocity amongst members
• However, experience has shown that it is detrimental to allow excessive static positive and negative balances to develop, and some groups impose credit limits while others use demurrage (negative interest) to keep the currency flowing.

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