Thursday, March 26, 2009 explains it perfectly - with a very simple animated story:

(via @vineeth)

The creators of this video did not close the loop completely. The investors at the end who have lost the money - where does their money come from? The creators of wealth in any economy are the workers, at the bottom of the chain in our case. These workers - you and I - want to give our monies to these investors in the hope of getting back "more" "later". And we keep asking for more - from our pension funds, from our 401Ks, from our insurance plans. This money comes back to us when we take a loan or a mortgage, leveraged many times over. We validate the business model of these investors.

Essentially, everyone is borrowing money from the future because we are too greedy to sustain ourselves on what we have today.

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