"If banks can borrow money from the federal reserve at 3%, why cant we? Why do we have to go through a money changer to get access to capital? In all honesty for profit banking should be outlawed like for profit hospitals were before Nixon. Usury is the problem in our society. Not capitalism."

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[–]magnora7 5 insightful - 1 fun5 insightful - 0 fun6 insightful - 1 fun -  (17 children)

I agree. Usury is the main cause of debt slavery, because the high rates makes the debts almost impossible to repay.

Debt can be used to help grow societies, but not when they charge you 15% for it, of which you must pay the interest first before the principal is touched, and furthermore wages never go up.

If all debt was suddenly forgiven once, it would be one of the greatest gifts to humanity we could imagine. Think of all the stress it would relieve.

[–]Jesus 4 insightful - 1 fun4 insightful - 0 fun5 insightful - 1 fun -  (0 children)

All debt annulation at least property and argriculture debt has been a reoccurring happening throughout intquity. This was done in order to stabilize the economy and relase the citizens from predatory creditor bondage. This provides a stable economy, strong army and the right to hold land and property. Now we see the exact opposite. Creditor jubilees, debt bondage, usury like never before. We follow primarily the Roman model of law and credit and after the assassination of some anti-usury tyrants, the debt bondage only became worse. Some say Rome fell due in part to debt bondage.

EDIT: Tyrants back in intiquity were known for annuling public and private debts for the people, where predatory aristocracies indebted them. Tyrants in Rome for many years were, indeed, seen as appropreaite rulers to relase corizens from debt bondage. The term tyrant today to us means something entirely different.

This is because words and terms have been changed to mean their opposites to confuse people. Neoliberals say they are for a free market but only if that free market is deregulation by regulation. Meaning a free market for us and not you! This confuses people and thusly they compare thr classical liberal ideals of Adam Smith's fdree markets and even Libertariams principles with austerity measures and neoliberal agendas.

[–]worm 1 insightful - 1 fun1 insightful - 0 fun2 insightful - 1 fun -  (15 children)

Forgive me for saying so, but if all debt was forgiven at once I suspect that financial markets may break down overnight; which might bring much more stress than it would relieve.

Jokes aside, I don't see what you mean by usury being the cause of debt slavery - whatever you mean by both terms. Is there any way you could lay out the reasoning behind that for me?

[–]Jesus 1 insightful - 1 fun1 insightful - 0 fun2 insightful - 1 fun -  (1 child)

What is your stance on public banking?

[–]worm 1 insightful - 1 fun1 insightful - 0 fun2 insightful - 1 fun -  (0 children)

I think that public banking is a good thing and it is possibly one of the reasons why the Spanish Empire collapsed while its competing European neighbours expanded all across the world.

Niall Ferguson's "The Ascent of Money" comes to mind.

[–]magnora7 1 insightful - 1 fun1 insightful - 0 fun2 insightful - 1 fun -  (12 children)

but if all debt was forgiven at once I suspect that financial markets may break down overnight

Probably true. It may cause a lot of short-term stress and the more responsible way may to be to do it gradually.

Debt slavery is when you cannot stop working because you must keep earning income to pay the debt on your house and credit cards and car. Usury (very high lending rates) causes this by greatly increasing the total amount of overall debt paid and amount of time needed to pay it.

[–]worm 1 insightful - 2 fun1 insightful - 1 fun2 insightful - 2 fun -  (11 children)

I don't really see the connection between usury and debt slavery; unless you're going to argue that borrowing is compulsory, it seems to me that those who live in debt slavery have nobody but themselves to blame for the weight of their debts.

Even a 12 year old is capable of understanding compound interest and how their debt would accumulate should they take out a loan. To argue that adults who took out unwise loans should somehow blame the lender rather than their own poor decision-making seems odd to me.

[–]magnora7 2 insightful - 1 fun2 insightful - 0 fun3 insightful - 1 fun -  (10 children)

So anyone who is tricked in to 20% APR should have to pay it? You're against Usury (overly-high interest) laws?

They basically are compulsory when the only other option is to lose your home. Which is the situation millions of Americans find themselves in, because wages are so poor they cannot buy a reasonable place to live.

Not to mention student loans, which are now over a trillion dollars, are basically demanded by society as well. So I'd argue that yes, it basically is compulsory from the standpoint of "the smart thing to do" as dictated by mainstream society and they're taking full advantage of that.

[–]worm 1 insightful - 2 fun1 insightful - 1 fun2 insightful - 2 fun -  (9 children)

Let's think about this for a moment. What is an overly-high interest rate? In the first place, if someone is willing to borrow even at such extortionate rates, then it would seem to me that the rates were not too high at all. If the rates were truly too high, then you would not have found anyone willing to borrow. The mere fact that people are still willing to take out loans, even at rates that you deem "too high", suggests that they would prefer to live with the interest and the results of their spending than without it.

But let's go back to the question you were responding to. When I asked you whether you assumed that people are forced to take loans, you answered that housing and education demand that people take loans. Let's assume for the moment that this is true.

If you were to prevent lending at reasonable, market rates of interest, then what I foresee is a collapse of lending to all but the most reliable of creditors. In other words, only those who already have considerable money and a stable income would be able to borrow money to fund the purchases of these "necessities" you have identified.

Maybe it would be a good way to force a population to spend within its means. It might even be a good way to prevent credit bubbles, for all I know. But I doubt that these are problems you set out to solve.

[–]magnora7 2 insightful - 1 fun2 insightful - 0 fun3 insightful - 1 fun -  (8 children)

Maybe it would be a good way to force a population to spend within its means. It might even be a good way to prevent credit bubbles, for all I know.

Yes of course it would.

But it's also a way to collapse the existing economy, and make literally millions of people instantly homeless. And stifle growth in the long-term.

So after the terrible transition period, it would probably work. But people would just start borrowing again, because who can turn down cheap/free money? The temptation is too great.

[–]worm 1 insightful - 2 fun1 insightful - 1 fun2 insightful - 2 fun -  (7 children)

And knowing all of that, you would still support a ban on usury? For that matter, you have not given any definition on what you would consider an overly-high interest rate to begin with. Would your definition perhaps be softened now that you've actually thought about what it would entail?

[–]magnora7 2 insightful - 1 fun2 insightful - 0 fun3 insightful - 1 fun -  (6 children)

There's already a ban on usury, I'd just advocate bringing the max interest rate allowed down gradually over time. I wouldn't just pull the rug out from under the existing system, it would have a 50-year wind-down plan if I were in control. And small interest rates would still be allowed.

[–][deleted] 3 insightful - 1 fun3 insightful - 0 fun4 insightful - 1 fun -  (4 children)

should have 4% or around there be max interest for all loans

I get that bankers need something for overhead but they don't need to be getting rich off this idea. Let them be middle class guys, make like 80k a year max.

[–]worm 1 insightful - 1 fun1 insightful - 0 fun2 insightful - 1 fun -  (0 children)

I'll assume that your citation of current laws (though I have no idea which jurisdiction you are in, and thus have no idea what those laws actually look like) means that you approve of the current definition of usury in some unnamed jurisdiction. But this is a rather lazy answer, isn't it? I don't see why the fact that we have such laws should necessarily mean such laws are wise laws.

The fact of the matter is that if interest rates were not high enough to offset the risk of lending, you would find fewer willing creditors and wind up with less credit. I would argue that the abolition of usury laws would in fact free up credit to those who need it the most, those who are otherwise too risky for creditors to willingly lend to.

You seem to be of the opinion that there are two types of lending: good lending, and bad lending. Good lending is good because the interest rates are low enough that they don't infringe upon the law. Bad lending is bad because the interest rates are too high. But such a simplistic definition inherently disregards the reason why people borrow in the first place; if someone borrows money, then regardless of the interest rates, the reason they are doing so is because they would prefer to have less money now rather than more money later, and it seems to me to be a perfectly fair goal to make this an available option to as many people as possible.

[–]MojaveCoyote 4 insightful - 1 fun4 insightful - 0 fun5 insightful - 1 fun -  (0 children)

Couldn't agree more. Everyone would be a lot better off if usury were illegal.

[–]Jesus 3 insightful - 1 fun3 insightful - 0 fun4 insightful - 1 fun -  (3 children)

Compound interest based on usury started in ancient sumer. The babylonians were the first to put it to full scale use, however thr creditor role cam about in Rome. Rome would hire Jews, espeically from the Hillel sect to manage their money. Jesus came to testore the jubilee year written into masaic law for Jews. Sects of Jews moves away from this jubliee and started to predatorize lending. Christians at the time banned usury so there was an overt hatred for moneylenders and aristocratic creditors. The roman catholics would the officially abolish the rule to not use predatory lending and so Catholics are now allowed to use usury as are Jews on goyim.

[–]Jesus 2 insightful - 1 fun2 insightful - 0 fun3 insightful - 1 fun -  (2 children)

Don't forgot Jews put jubilee into Mosaic law. Many people say Jews are the reason for usury, I say that is quite mistaken as they in neobabylonia created thr annulation of debts after a certain amount of years. A certain sect of Jews replaced this.

[–]magnora7 3 insightful - 1 fun3 insightful - 0 fun4 insightful - 1 fun -  (1 child)

Usury used to be illegal among Jews, Christians, and Muslims.

The Jews were the first to break this commandment, with the stipulation that interest could be charged on loans to goyim (non-jews).

This ability to lend and circumvent the religious laws, led to this whole trend of Jewish bankers lending to Christian kings and queens, which made the bankers fantastically wealthy because they basically had a monopoly.

Later Christians basically got rid of this law, so they can lend at interest. And Usury is defined originally as ANY interest, not just excessive interest.

Last Muslims have just started to get rid of this law. But they still have a very stringent finance system compared to the west, and have different ways of making money on lending money rather than interest, but in effect it's the same: https://en.wikipedia.org/wiki/Islamic_banking_and_finance

This progression of usury explains a lot of world history, imo.

[–]Jesus 2 insightful - 1 fun2 insightful - 0 fun3 insightful - 1 fun -  (0 children)

Yes, Jews basically banned usury and put it into mosaic law to annul debts as jubilees. The Book of Jubilees has all the information on this, but the Catholic Church took it out of the canon.

The Jews were the first to break this commandment, with the stipulation that interest could be charged on loans to goyim (non-jews).

Yes, and no. Sumer did this before and in neobabylonia. But it was the Hillel sect of Judaism that allowed for usury to expand and progress. Jesus was very much against this.

I agree that the progressive of usury explains a lot of world history.

[–]worm 2 insightful - 2 fun2 insightful - 1 fun3 insightful - 2 fun -  (1 child)

Probably for the same reason that the German 10Y bond sits at a negative yield, while the Argentinan 10Y bonds sit at something like 20-25% yields.

Commercial lending and retail lending are completely different markets. It's one thing to lend money to a wealthy and well-known corporation, and another thing entirely to lend to any old John Doe. Even without examining the entirely different sets of laws, rules, and expectations which lie behind each kind of lending, the difference in risk is immediately obvious on matters of size and reputation alone.

I'm not saying that central banking is necessarily a good idea, because I'm not convinced by central banking either. What I am sure of, however, is that a central bank wouldn't find it easy to open up a retail banking business, and I don't think it should even try.

Edited for capitalisation issues.

[–][deleted] 2 insightful - 1 fun2 insightful - 0 fun3 insightful - 1 fun -  (0 children)

big corporations needed getting bailed out, they're not always worthy of the loans, but have connections

[–][deleted] 1 insightful - 1 fun1 insightful - 0 fun2 insightful - 1 fun -  (0 children)

cancel odious debt