The Problem is not Debt, it’s Interest

[Hatha Sunahara]

Interest, or what our ancestors called usury, is the cause of the world being divided between haves and have-nots.


Here's a guy who has grasped that concept:


http://www.youtube.com/watch?feature=player_embedded&v=qYwWmDOtLW8

You can read more of his stuff here:

http://realcurrencies.wordpress.com/

Good discussion of the "Fiscal Cliff" here.


Hatha

[palani]

Lawful money comes with no usury. Legal money comes with strings attached (interest and 1040 form reporting requirements). Constitutional money is specie (gold or silver).

[BarnkleBob]

Todays economic problems are many so it is absurd to point to just one cause... with that said, traditional deflation occurs for two reasons 1, excess savings or 2. excess debt. Either of these will create a "gap" in the economy. The Great Depression was a gap between savings & debt. The gap was closed by WWII... goods & services were rationed and limited during the war. People were forced to save rather than consume... thats how WWII got the world out of deflation & depression. Bernanke is following the Keynesian script to a tee trying to close the gap....have a look: http://www.wikipedia.org/wiki/Keynesian_economics Its a Keynesian balancing act between consumption, production & savings...

[Libertarian_Guard]

Todays economic problems are many so it is absurd to point to just one cause... with that said, traditional deflation occurs for two reasons 1, excess savings or 2. excess debt. Either of these will create a "gap" in the economy. The Great Depression was a gap between savings & debt. The gap was closed by WWII... goods & services were rationed and limited during the war. People were forced to save rather than consume... thats how WWII got the world out of deflation & depression. Bernanke is following the Keynesian script to a tee trying to close the gap....have a look: http://www.wikipedia.org/wiki/Keynesian_economics Its a Keynesian balancing act between consumption, production & savings...




http://i46.tinypic.com/19m9u8.jpg

[Santa]

Todays economic problems are many so it is absurd to point to just one cause...

It actually strikes me as more absurd to offhandedly dismiss usury, clearly the most egregious problem just to make an arcane point about Keynesian economics theory.

Personally, in my most Shakespearean sardonic tone, I'm all for stringing up Economists right along with Lawyers.

[Hatha Sunahara]

The Lawyers and Economists are the employees of the bankers. So are the politicians. Their jobs are to rationalize and legitimize usury, and to maintain the status quo. I agree that they should share the fate of their employers. Nothing will change however until a critical mass of people begin to understand how horribly they are being screwed by the bankers, lawyers, economists and politicians.


Hatha

[palani]

Nothing will change however until a critical mass of people begin to understand how horribly they are being screwed by the bankers, lawyers, economists and politicians.
If they were dealing in gold or silver I would tend to agree with you. But they are not. They are only dealing with worthless scraps of paper and they know it. You can go your own way without injury at any time you like so you have no argument with any of them. In a way I can understand what they have done and by and large they have been successful in constructing a wealthy and peaceful society. Too bad the rest of the world must be destroyed to accomplish this.

[messianicdruid]

Too bad the rest of the world must be destroyed to accomplish this.

Repent = change mind.

the debate:

http://revisionistreview.blogspot.com/2012/12/debate-online-over-usury-in-christendom.html

Usury in Christendom: The Mortal Sin that Was and Now is Not

http://revisionistreview.blogspot.com/2012/12/two-encomiums-for-hoffmans-book-on-usury.html

[gunDriller]

Debt is like a Noose, around the neck of individuals and society at large.

When interest rates go up, the Noose tightens.

Just the way the Usurers intended.


But all is not lost. We just need to find ways to help each other escape from debt. Because student debt can not be retired through bankruptcy, that means giving students who want to shuck their debt, Asylum.


It also means canning the Bush "Bankruptcy Reform" law. No matter how loudly the Piggy Usurers Squeal.

[Libertarian_Guard]

http://i45.tinypic.com/aliu1k.jpg

[iOWNme]

I disagree with the OP.....

Lets say 'interest' was never used at all. Can the politicians still create debt? How are you ever going to pay back a 'National Debt' that is over $15 TRILLION?

Dont get me wrong, in your everyday personal life, getting loans with no interest is obviously the moral and right way to do voluntary transactions. But this does NOTHING to address the 'National Debt' that ALL COUNTRIES impose on their citizens.

Sure, interest is usury is EVIL, but if they can continue to just pile on the debt, i dont care how strong your dollar is and how hard you work, you will FOREVER be enslaved to that debt. There was debt created under the Articles of Confederation and no 'usury' system, who created it and who was liable for it? That debt got rolled over into the US Con, still with no usury system in place, who created it and who was liable for it? In this 'Constitutional Republic' we are supposed to believe that 'We The People' created the debt (Through their 'elected representatives') and it is 'We The People' who are liable for it. More pseudo-religous quackery and no different than an ancient tribe stealing a mans daughter to throw her into the Volcano to make their crops grow. A man cannot enslave another man to debt, because the majority voted for it, no more than i can steal your daughter and sacrifice her to the Volcano God.

Can a man delegate a Right he does not have? :)

IMO, the entire problem stems from peoples 'belief' that somebody else can create a notebook entry, call it debt, and then hold MILLIONS of people liable for it. Another word for this is called 'Government'.

If the Bloods and the Crips came out and claimed that all of LA owes them money for their 'protection and services' what would be the difference? The difference is people see the Bloods and the Crips as the CRIMINALS they are, but when it comes to the superstitious belief in 'Authority' people feel the moral obligation to obey CRIMINALS who think they can legislate their way around morality.

[Hatha Sunahara]

Dick Cheney was right. The deficit doesn't matter. The national debt also doesn't matter. It cannot and will not ever be repaid. It's because the money is created by somebody going into debt, and because the interest is never created by the bankers. If interest compounds, eventually people will not be able to produce enough real wealth to pay it. It's a mathematical cul de sac. Because it cannot be repaid, it doesn't matter. I hate to give Dick Cheney credit for anything, but he was right on this issue. Too bad he didn't bother to explain the particulars to the unwashed masses.

Hatha

[Libertarian_Guard]

"We are completely dependant on the commercial banks. Someone has to borrow every dollar we have in circulation, cash or credit. If the banks create ample synthetic money we are prosperous; if not, we starve. We are absolutely without a permanent money system.... It is the most important subject intelligent persons can investigate and reflect upon. It is so important that our present civilization may collapse unless it becomes widely understood and the defects remedied very soon." -- Robert H. Hamphill, Atlanta Federal Reserve Bank

[mamboni]

Dick Cheney was right. The deficit doesn't matter. The national debt also doesn't matter. It cannot and will not ever be repaid. It's because the money is created by somebody going into debt, and because the interest is never created by the bankers. If interest compounds, eventually people will not be able to produce enough real wealth to pay it. It's a mathematical cul de sac. Because it cannot be repaid, it doesn't matter. I hate to give Dick Cheney credit for anything, but he was right on this issue. Too bad he didn't bother to explain the particulars to the unwashed masses.

Hatha

If you carry your notion out into the future, given that the rate of debt growth now exceeds the rate of GDP growth, and interest rates go negative, then the future will be something like this: US national debt $100 trillion; US GDP $30 trillion; US Annual Debt Service $1 trillion notional at 1% weighted average of all durations. So debt service is quite manageable at 3% of GDP and approximately 12% of the federal budget assuming the latter climbs to about 25% of GDP. But here's the interesting part: this situation can go on indefinitely because we are using notional dollars. In practice the dollar is devaluing at more than 1% per annum. So the national debt principal is slowly decreasing in real purchasing power. If the real interest rates are -3% then the debt principal is decreasing at 2% per annum. If would appear than the US is getting a free ride running continuous deficits and ever increasing national debt to infinity. But in fact, the US is engaged in dollar dilution akin to a company that raises cash through stock dilution. All during this process, the average American is getting poorer and experiences a declining standard of living relative to the past and versus most of the rest of the world. Unless an American can accrue dollar wealth at a greater rate than the rate of devaluation, he is getting poorer. Holding tangible assets such as gold and land will, over the long term, keep his wealth constant. Barring a dollar crisis such as a run on treasuries, the US can run massive federal deficits for years before the dollar becomes virtually worthless. In theory this devaluation can go on indefinitely. In practice, the insidious destruction of capital structures engendered by this slow devaluation eventually causes to economy to destabilize and be extremely vulnurable to market volatility. A heretofore recession evolves into a severe depression. I think that is what we are headed for in 2014.

[Cebu_4_2]

link?


If you carry your notion out into the future, given that the rate of debt growth now exceeds the rate of GDP growth, and interest rates go negative, then the future will be something like this: US national debt $100 trillion; US GDP $30 trillion; US Annual Debt Service $1 trillion notional at 1% weighted average of all durations. So debt service is quite manageable at 3% of GDP and approximately 12% of the federal budget assuming the latter climbs to about 25% of GDP. But here's the interesting part: this situation can go on indefinitely because we are using notional dollars. In practice the dollar is devaluing at more than 1% per annum. So the national debt principal is slowly decreasing in real purchasing power. If the real interest rates are -3% then the debt principal is decreasing at 2% per annum. If would appear than the US is getting a free ride running continuous deficits and ever increasing national debt to infinity. But in fact, the US is engaged in dollar dilution akin to a company that raises cash through stock dilution. All during this process, the average American is getting poorer and experiences a declining standard of living relative to the past and versus most of the rest of the world. Unless an American can accrue dollar wealth at a greater rate than the rate of devaluation, he is getting poorer. Holding tangible assets such as gold and land will, over the long term, keep his wealth constant. Barring a dollar crisis such as a run on treasuries, the US can run massive federal deficits for years before the dollar becomes virtually worthless. In theory this devaluation can go on indefinitely. In practice, the insidious destruction of capital structures engendered by this slow devaluation eventually causes to economy to destabilize and be extremely vulnurable to market volatility. A heretofore recession evolves into a severe depression. I think that is what we are headed for in 2014.

[mamboni]

link?


Link to what?

[BarnkleBob]

Deflationary Gap > Economic term describing the situation when Gross Domestic Product is below its full-employment level. In theory, such a situation would lead to the existence of unemployed resources, which should lead to falling prices (deflation) for those resources as the unemployed ones compete in the market

Inflationary Gap> When aggregate demand exceeds aggregate supply, thus causing prices to increase if the economy is at full employment, or bringing about increases in production if it is not. It is usually attributed to government operating on deficit, thereby spending more than it receives in taxes and, so, creating excess demand.