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An example of how the debt paradox is wrong: Suppose I am a fisherman and I create IOUs to buy a boat and those IOUs are used as currency. The IOUs are debt, just like the dollar, and they have interest payments. I don't have to create more debt to pay the interest because I can pay the interest with fish (or IOUs gained by selling the fish). Everything is ok as long as I don't go so far into debt that I can't pay the interest with fish. If I have to continually create more debt to pay the interest (as the U.S. is currently doing) then eventually the system will collapse.
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I see what you're doing there, but interest (I) and the load (L) have to be paid in dollars, not something else.
I have to take that out of the total money supply (S), where every dollar bears interest (apparently, don't know if this is true).
S = L < L + I
So where does the interest has to come from? Or is this way too simplistic?
Currency is reused. Suppose my interest payment to the lender is the value of a load of fish. So I go fishing and I get a load of fish. The lender (for example) buys the load with some currency and I make the interest payment with that same currency. I could potentially do this forever and there is no need for additional currency to make interest payments.