Unfair Tax and Usury
When Joe Bloggs down the street can’t pay his debts fair-square, but services them with his credit card collection, it’s only a matter of time before the fat men in dark glasses come around to punch his lights out.
Yahoo News carries an opinion piece stating that Banks are responsible for the ongoing woes in the US financial system by their insistance that debtors pay their debts on the terms of the existing contract:
One reason foreclosures are so rampant is that banks and their advocates in Washington have delayed, diluted, and obstructed attempts to address the problem. Industry lobbyists are still at it today, working overtime to whittle down legislation backed by President Obama that would give bankruptcy courts the authority to shrink mortgage debt.
The problem, of course, is that the system is unfair and patching up wounds through a partial debt jubilee won’t work. Banks are usurers. The current credit system is totally immoral and nobody should take any part in it. But government, by borrowing to “bail out” the economy, is placing itself in the same position as the banks. It is usury upon usury.
When a bank issues a loan, it charges a rate of interest roughly proportional to the rate of inflation, but this is usually higher. Inflation causes the value of money to shrink and is a reflection of the diluting power of increasing the supply of money as occurs with the issuing of new loans.
The real interest that one is paying on a loan is therefore much higher than the stated value. When a housing loan is set at 6% annual interest, and inflation is roughly 5%, the real rate of the loan is going to be somewhere between 6 and 11%, depending on whether wages are increased in parity with inflation. It has been the case over the last thirty years that in most established industries, wages do not grow at the rate of inflation. People don’t notice this as their own pay goes up as they rise in seniority and rank, but if they ask what the entry level job is paying, then it becomes clearer.
Any bank that charges more than 5% on a loan, in real terms (taking into account inflation and wages growth), is guilty of usury.
If a government is in debt to a bank that is placing the same burden on the government as occurs to other victims of usury, then it follows that every tax payer is subject to that same usury. Governments should not be allowed to go into debt on these terms. It’s immoral.
So why are people defaulting on their loans?
The value of housing was being inflated because of speculation and the reality of inflation. People ran to property to protect themselves, like people running for a tree to get out of the rain. If everybody chooses the same tree, however, then the tree cannot realistically protect them all. So the property bubble has burst, especially in the US, where people were building houses at such a rate that an oversupply resulted.
At the same time, people’s incomes have failed to rise with inflation and interest. Taxes have been increased in various ways to fund wars and service ever growing debt. Poorer, year by year, people finally collapsed under the heavy burden imposed on them by banks and government.
The solution, then, is to take away this burden, to phase out the system of debt on which economies are currently based and to reduce taxes. Put an end to usury.
Sadly, however, our governments are not talking about usury. The word has been lost from most people’s vocabulary. Instead, governments are bailing out, borrowing, spending, spinning in circles faster and faster, yet none of it is working. The scary thing about it is that a massive loss of life becomes a likely event when governments take such desperate, counter-productive measures.