I use a very simple explanation when I talk to people. First off, I clarify the issues by emphasising that the principles of the economic system are the same, no matter how many people are in the society. It doesn't matter if there are 20,000,000 (population of Australia), or 2,000,000 - the same principles apply. It also doesn't matter if there are 200,000, or 20,000 or 2,000 - or if there are only 200, or 20 or JUST 2.
I then select two people from the group. They represent the society. I am the banker. They have to use my 'legal tender'. I loan each one $100 at 5% interest. I then turn to one of the people and say "at the end of the year, how much do you repay me?" They naturally reply with "$105".
Now comes the clincher. I then turn to the other person and ask that person how much they repay me. They always say "$105".
Wrong! I remind them how much legal tender I put in circulation - only $200.
When the first person paid back $105, that only left $95 in circulation.
I then look at the second person and tell them that he/she cannot repay their debt. I reach across and take something of theirs (a pen, purse, cup of coffee - whatever). "You just lost your house!"
By making personal it drives the point home.
I was at a breakfast with some Ministers of Papau New Guinea one time and performed my little skit. When I took the pen away from the number three man in the Government and told him "you just lost your country", he looked at me in stunned silence, I smiled, he smiled back and nodded - he got it. Later I learned he pulled the same skit at a Cabinet meeting. Hopefully, something as simple as that might make a difference the next time they get offered a loan by the IMF.
Try it on a couple of your friends - it freaks them out to find out that the system is a scam.