Usury

[ThoughtAddict]

Originally Posted by fountainAtlas

And what is it with your idea that the wealthy should give there money away to charity, why? Why should they give away money that they have worked for earned or inherited to you?

If you had said, "why should the wealthy be forced to give away their money", I'd agree with you. Are you really saying that people should not contribute to charity?

Originally Posted by fountainAtlas

At the very least a wealthy person has managed to hold on to their worth, that isn’t as easy as it sounds. A great man once said that the easiest way to become a millionaire is to start with a billion and lose 999 million. You should be grateful for how loose lending is; at least there aren’t any debtors’ prisons.

Holding on to wealth isn't easy? The easiest way to become a millionaire may be to start with a billion, but that's not because it is so hard to make money grow. It is because making the first million dollars is times more difficult than making a second. Holding onto wealth is relatively simple as long as you're not greedy.

Originally Posted by fountainAtlas

But pure charity only allows people to continue to not work and perpetuates an entitlement sentiment. I am still trying to get over how someone who writes well and is apparently capable of intelligent discourse can have views that are so disturbing.

Speaking as someone who has relied on pure charity at one point in my life, the helping hand can be pretty necessary to allowing survival of people who will be productive in the future. Luckily, pure charity was there. My family and I survived, and we've gone on to provide some benefit to society.

While I can agree that charity to someone who refuses to contribute could be restrained, pure charity to people who have hit hard times strikes me as a Good Thing, far from disturbing.

[fountainAtlas]

"If you had said, "why should the wealthy be forced to give away their money", I'd agree with you. Are you really saying that people should not contribute to charity?"

I meant force, one should be able to do whatever they want with their money, give it away, spend it, or even burn it (Dark Night). But the way Apollia said it made it seem like they should be required to give it away.

Holding on to wealth isn't easy? The easiest way to become a millionaire may be to start with a billion, but that's not because it is so hard to make money grow. It is because making the first million dollars is times more difficult than making a second. Holding onto wealth is relatively simple as long as you're not greedy.

I think you underestimate how many people die poorer than they started. It seems that if you are not the one who earned the money you have difficulties holding on to it.

Speaking as someone who has relied on pure charity at one point in my life, the helping hand can be pretty necessary to allowing survival of people who will be productive in the future. Luckily, pure charity was there. My family and I survived, and we've gone on to provide some benefit to society.

While I can agree that charity to someone who refuses to contribute could be restrained, pure charity to people who have hit hard times strikes me as a Good Thing, far from disturbing.

I agree that in some cases it is a "Good Thing". But, the way the world works, or more importantly the way I believe it does, is that for one person who received charity and became productive there will be 10 people who will see that as an excuse to not contribute and bleed the donors of their money. On a different note, we have all received charity at one point or another, for everyone was born and for 10+ years we could not take care of ourselves.

[Dannyboy1]

Originally Posted by Lauxa

What do you think the world would look like without usury? What would wealthy people do with their money if they couldn't loan it out at interest?

Chances are, they borrowed most of their money to make their money.

[ThoughtAddict]

Originally Posted by fountainAtlas

I think you underestimate how many people die poorer than they started. It seems that if you are not the one who earned the money you have difficulties holding on to it.

That's not because it is difficult to hold on to money. You can easily lose inherited money if you don't know how to or don't try to create value, don't understand finances, have a poor attitude regarding money, or have a sense of entitlement. Yep, I've seen people who were born rich end up with very little. In every case where a person went chapter 7 after being born into significant wealth, they had misunderstood money, made unsafe business choices with large amounts of capital, failed to diversify, and put in insufficient work to determine the appropriate actions.

Originally Posted by fountainAtlas

I agree that in some cases it is a "Good Thing". But, the way the world works, or more importantly the way I believe it does, is that for one person who received charity and became productive there will be 10 people who will see that as an excuse to not contribute and bleed the donors of their money. On a different note, we have all received charity at one point or another, for everyone was born and for 10+ years we could not take care of ourselves.

You're free to believe what you want about the world, no matter how depressing. What I'm saying is that the world isn't the way you believe. The world isn't so cold. More than 10% of people in bad situations crave a better life, and are willing to work for it. Yes, there are people who seek to exploit good deeds. These people are often those who don't have any hope for a way out. But they don't make up such a bulk of the population. In my inner circle of friends, 3 of the 6 have been recipients of pure charity. Two are pursuing law, the other is an author and journalist. Eliminate charity, and you'd have done away with those 3, or at least altered their ability to pursue these goals.

Like I said, you're free to believe what you want. I'm not sure why you'd want to live in a world that sees leeches rather than human beings, but it is your choice. There are other choices. Other worlds you could live in. There are wonderful people in those worlds, if you choose to join them there.

[Apollia]

Whew... I didn't mean to write such a long message as this. This is why I should avoid forums. Or maybe I should channel all this enthusiasm for writing on topics I care about into having a blog or something else that I can profit from.

Oops, it's so long I actually have to split it in two posts.

Originally Posted by fountainAtlas

I meant force, one should be able to do whatever they want with their money, give it away, spend it, or even burn it (Dark Night). But the way Apollia said it made it seem like they should be required to give it away.

Really? Oops, I didn't mean to give that impression. I don't think anyone should be required to give money away at all. I'm even against all income taxes for anyone, rich or poor.

(Quote on the topic of charity: )

I agree that in some cases it is a "Good Thing". But, the way the world works, or more importantly the way I believe it does, is that for one person who received charity and became productive there will be 10 people who will see that as an excuse to not contribute and bleed the donors of their money.

Is there really anyone who would really prefer to be a leech who is totally, helplessly dependent on others for their survival, rather than self-sufficient? Especially if you're dependent on cold-hearted, nasty people who don't care at all about you, and are willing to pressure you to do things you don't want to do simply because they have power over you.

That's not my situation, fortunately. But, it's bad enough being dependent on family even if your family is nice to you, since I'm well aware I'm going to have a very difficult time making it in the world if anything happens to them. Wanting to escape being dependent on family (or anyone else) was part of what drove me into debt in the first place.

Originally Posted by fountainAtlas

Honestly Apollia I am amazed at your view of the world, maybe it is because my view is nearly the exact opposite. Would your life have been better if there was no debt?

Hard to say. The entire world would probably be very different.

But maybe you just mean, no debt in my own life. In that case... yes, I do think my life probably would have been better. Probably at worst, I would have continued financially stagnating, but more likely, I would have ended up slowly building up savings.

That certainly would have been a great deal better than my current situation - sliding ever-deeper into the hole at the rate of at least around $300 per month (from late fees, overlimit fees, and penalty interest), being too broke even to go bankrupt, and being at risk of having anything I might store in the bank stolen by Capital One or Providian if they go to court and put a levy on my bank account, as well as at risk of having my wages garnished if I get a regular job.

You yourself have admitted that you only took on debt because it was the lesser of two evils,

Well, a lesser evil amongst an unknown number of other evils, most of which I didn't even consider.

meaning that debt, which crippled you later on, saved you at one point.

Actually, I can't give it that much credit. Before I went into debt, when I was a teenager, rather than being on the brink of any serious adversity (aside, of course, from the imminent danger of me foolishly going into debt), I simply had an exaggerated idea of how bad my situation was (being dependent on my family, or anyone else, made me very uneasy, and I still don't like it, even though my family is overall good to me), and I was very depressed and very impatient for things to improve.

I also felt under pressure at that age to do what I felt was the normal thing for people my age to do - move out, go to college, get a job - regardless of whether it was practical or not. Ultimately, I decided on an alternate path (not moving out; and going into debt to get a computer, which I hoped to somehow use to make money which I could use for college or something). But, not having blossomed into a fully self-confident nonconformist, I felt an extraordinary amount of pressure not to fail at that, which made me even more miserable and reckless.

I would have been better off realizing that having a virtually unlimited amount of time to build up some savings at a nice, relaxed pace, whilst under no pressure from having debts to repay, was a far better, more practical situation for me to remain in, and far kinder to myself, than needlessly making things harder for myself by unhappily pushing myself into a "do or die" or "sink or swim" sort of situation, and gambling that in the process I'd develop the ability to handle it.

Why do you refuse to take responsibility for your actions?

I'm taking responsibility - but, in addition, I'm pointing out that there are a lot of factors besides my own actions which led to the excessively bad consequences which befell me. For instance, credit card companies greedily imposing their unfairly high late and overlimit fees and penalty interest rates to vampirically capitalize on people's misfortune, amd kick people like me when they're already down.

The child support system is also partly to blame. Throughout my teen years (and also for many years after I turned 18), my family was legally obligated to pay child support to a relative's ex-wife to supposedly support 2 children - despite the fact that our family had two children of our own to support (me and my baby sister) - and despite the fact the ex-wife didn't seem to actually need the money, given that the ex-wife had/still has a BMW, and a tendency to waste money on Gucci bags and needless new furniture. (So who knows how much of that child support the ex-wife actually even spent on the children and not some overpriced frivolous junk, when meanwhile, my family was just trying to scrape by).

Then there's the matter of income taxes. That deprived (and still deprives) me and my family of a substantial amount of money we worked hard for and rightfully earned, and it has done nothing but make all our lives harder.

And then there was/is all the debt my family was already in, constantly draining us of money so we had very little left over once all the bills were paid, and which gave me the impression of being trapped on a sinking ship. And some other factors which I don't want to get into.

If not for the above factors, my entire family would have been much better off, and I might not have been quite as depressed and desperate as to be half-willing to go into debt to begin with.

I also would have been better able to pay off my debts if not for income taxes, Social Security, etc. stealing my earnings, and if the credit card companies hadn't been able to get away with charging me thousands of dollars in fees and penalty-rate interest.

I really don't think any teenager (or even any adult) who makes a few dumb mistakes should, as a result, be forced to give 25% of their wages to some credit card companies for the rest of their life. (Which is probably what would happen to me if I were still willing to pay, since I think it is rather unlikely that I will become financially prosperous enough to ever entirely pay off my so-called "debt" - if it can even be called debt, when it mostly consists of usurious fees and interest and relatives' debts placed in my name, rather than charges I made for my own expenses).

(continued below)

[Apollia]

Originally Posted by fountainAtlas

It seems like you came from some difficult life circumstances, but are you sure that you don't have a few too many "wants" that you used debt to finance.

Sure, a few. But, most teenagers aren't known for good judgment. My mistakes are all perfectly clear in hindsight, but it's far too late for anyone to repair the damage and give me back all the opportunities I lost as a result of being ensnared at a vulnerable time (naive youth) in something akin to indentured servitude.

And what is it with your idea that the wealthy should give there money away to charity, why? Why should they give away money that they have worked for earned or inherited to you?

I will answer this as if you're not referring to force, because I wasn't recommending force in the first place. I think nothing should force the rich to donate money, except perhaps their own conscience.

There are tons of people who could use such charity much more than I could, so I wouldn't say wealthy folks should necessarily give money to me in particular (though if they really want to for some reason, I won't complain ).

But as for the idea of giving it to others who need it more, sure, why not? The wealthy have tons of money. Why not rescue a lot of people from starving to death, even if you can't afford to save every starving person in the world? If I were rich, I would be constantly haunted by the thought of all the starving, miserable people in the world (especially children) whose lives I could almost effortlessly save just by using my wealth. I would never have any peace unless I did something about it. Even now I feel guilty for not being able to do more.

As for a more selfish reason why people should rescue the poor - there are probably tons of talented artists, musicians, writers, inventors, etc. who end up destroyed by poverty in various ways, such as by their lives being cut short by preventable ill health, or by being driven to despair and suicide. At best, these artistis, etc. might end up wasting so much time working at a mindless job that they don't produce as many creative works as they otherwise would be able to. Any art, music, literature or technology lover, even one who is a non-humanitarian, should find that to be reason enough not to abandon everyone to near-slavery and misery.

Persuading the rich to be more generous is fortunately not my only idea when it comes to charity. I'm actually much more interested in one particular alternate idea - microdonations.

One of the great things about the microdonations concept is that it requires no contributor to be wealthy or to make a burdensomely large contribution in order to make a significant difference. A tiny donation like $1 could add up to a very large amount of money if a large number of people could be persuaded to donate $1 at the same time for the same cause.

At the very least a wealthy person has managed to hold on to their worth, that isn’t as easy as it sounds.

What an enviable difficulty to have that would be.

A great man once said that the easiest way to become a millionaire is to start with a billion and lose 999 million. You should be grateful for how loose lending is;

It's hard for me to be grateful for more rope to hang myself with. Or more leashes to tether me to unwanted masters and give them power over me no one in a free society should have over another human being.

Fortunately, though, I don't have that problem anymore - my credit report is probably so destroyed after being in default for about a year, I'm pretty sure it would be very difficult for me to find a loan or more credit even if I wanted to look.

at least there aren’t any debtors’ prisons.

Except you can be thrown in jail due to owing child support or taxes, at least in the USA.

There are certain types of charity that is good, those that promote education and facilities more members of society to become productive.

Yes, free education, etc. would be great. However, I still think no-strings-attached forms of charity which leave people free (instead of imposing some kind of obligation on them to try and make them become "productive"), are likely to facilitate people to become productive anyway, despite no one cracking the whip to make them do it.

For instance, if someone had simply _given_ me a decent computer when I was a teenager, I think that would have done me a lot of good, and I would have probably developed better programming/web design skills years earlier, and would probably be a much better programmer/web designer today, and much more capable of earning a living.

But instead, I ended up wasting a year of my life at a meaningless job as a copy editor/typist as a small newspaper. I guess anyone who regards miserable drudge work as virtuous for its own sake, regardless of the much better things one could do with one's time if one wasn't a wage slave, might think that was good - but I think I could have accomplished many more valuable things had my circumstances, debt, and peer pressure not encouraged me to stick with such a pointless job.

(The thing I found pointless about that job was the fact that that job did hardly anything to improve the world at large. Although, since my boss was a nice guy, I'm not unhappy that I saved him some money in the time I was there. He said I did the work of three people, by the way - so, lest there be any doubt, I just wanted to mention that, to show I am definitely capable of being productive ).

But pure charity only allows people to continue to not work and perpetuates an entitlement sentiment.

You sound like you have no problem with inheritance, though - despite the fact that inheritance is often thought to produce much the same results, "spoiled rich kids", etc.

Actually, I don't have a problem with inheritance myself. I'm glad at least some people never have to worry about money and aren't pressured by their circumstances into becoming wage slaves, etc. I wish everyone had a huge inheritance.

I am still trying to get over how someone who writes well and is apparently capable of intelligent discourse

Why, thank you.

can have views that are so disturbing.

If _I_ shock you, what do you think about Steve's article, 10 Reasons You Should Never Get a Job?

Thanks for inspiring me to write these messages, it was fun. I hope it helps make my views more understandable and less disturbing to you.

Best wishes,
Apollia

[Apollia]

Originally Posted by Lauxa

As far as limiting freedom goes, this stuff is more in the realm of contract law. As in which clauses in contracts will be enforced by the government and how. So the government wouldn't have to go out and actively stop people from entering into usurous contracts, but the collectors wouldn't have government authority to back up the collection of the monies.

I like that approach. That, too, would discourage usury without applying any force. If the government wouldn't do wage garnishments, bank account levies, etc. on behalf of creditors' usurious contracts, it would actually be a reduction of government interference in people's lives.

Best wishes,
Apollia

[Lauxa]

Has anyone looked into LETS (Local Exchange Transaction System)? It markets itself as a self-regulating usury-free "currency".

[fountainAtlas]

Originally Posted by ThoughtAddict

You're free to believe what you want about the world, no matter how depressing. What I'm saying is that the world isn't the way you believe. The world isn't so cold. More than 10% of people in bad situations crave a better life, and are willing to work for it. Yes, there are people who seek to exploit good deeds. These people are often those who don't have any hope for a way out. But they don't make up such a bulk of the population. In my inner circle of friends, 3 of the 6 have been recipients of pure charity. Two are pursuing law, the other is an author and journalist. Eliminate charity, and you'd have done away with those 3, or at least altered their ability to pursue these goals.

Your last point is a mater of circumstance. In my life, I haven’t encountered those situations, though I haven't sought out charity success stories (maybe I am only looking for stories that support my beliefs?). Yet, we all have heard and seen stories of people who abuse social security and the welfare system.

Further, my jaded view is probably the result of me not receiving charity, when I felt I should have. Thus, my view, when written, looks more childish than cold.

I suspect that if I was exposed to more success stories such as your friends, my frigid outlook on the world would thaw a bit.

Originally Posted by ThoughtAddict

Like I said, you're free to believe what you want. I'm not sure why you'd want to live in a world that sees leeches rather than human beings, but it is your choice. There are other choices. Other worlds you could live in. There are wonderful people in those worlds, if you choose to join them there.

The world is what is, and how we perceive it is a matter of circumstances and attitude. I am very lucky, in a way, that I did not receive charity. For I suspect that it would impart feelings of guilt onto me. There are some people who were able to achieve a college education without charity, even when they came from the most desperate situations. And if they can do it, without charity, then is charity necessary? My over all view is that, charity is good only when properly given, and horrible when given improperly. That is why I view charity, as whole, to be negative for society.

[ThoughtAddict]

Originally Posted by fountainAtlas

My over all view is that, charity is good only when properly given, and horrible when given improperly. That is why I view charity, as whole, to be negative for society.

You've come to the crux of it, but left with a conclusion that throws the baby out with the bathwater. There are abuses, which is why I'm in favor of welfare reform and careful charity.

We can agree, I think, that charity given properly would be positive for society as a whole as well as for the individual recipients. So, we should focus on and move toward a system that uses the good sort of charity and eliminates abuses, no?

[fountainAtlas]

Originally Posted by Apollia

Really? Oops, I didn't mean to give that impression. I don't think anyone should be required to give money away at all. I'm even against all income taxes for anyone, rich or poor.

Good we agree. I suspect you and I can have a great discussion on taxes and how they relate to charity, but for now I am going to limit myself to the topic at hand.

Originally Posted by Apollia

Is there really anyone who would really prefer to be a leech who is totally, helplessly dependent on others for their survival, rather than self-sufficient? Especially if you're dependent on cold-hearted, nasty people who don't care at all about you, and are willing to pressure you to do things you don't want to do simply because they have power over you.

Yes. I believe there are a lot of people like that. They believe that their suffering is in itself a virtue and thus they deserve charity form those who have more than them.

Originally Posted by Apollia

Wanting to escape being dependent on family (or anyone else) was part of what drove me into debt in the first place.

While, understandable, but are you sure you aren’t just making excuses for your actions?

Next quote is in regards how your life is better or worse because of debt.

Originally Posted by Apollia

Hard to say. The entire world would probably be very different.

But maybe you just mean, no debt in my own life. Well, a lesser evil amongst an unknown number of other evils, most of which I didn't even consider.

What I was trying to get at was what would happen if debt wasn’t available to you when it was the "lesser of two evils"?

Originally Posted by Apollia

I also felt under pressure at that age to do what I felt was the normal thing for people my age to do - move out, go to college, get a job - regardless of whether it was practical or not.

I do not know how to get my point across so I apologies in advance if I offend. It seems to me that you make excuses for your situation. The pressures of life and the weight of circumstances forced you into debt and now the pressure of debt continues to force you into your present situation. If you, like I said before, try to take responsibility (both mentally and physically) the outcome may be better. I had a similar problem of saying that event X caused me to miss opportunity Y. That was until I realized that there were A, B, and C that I could have done to mitigate X. Thus, me missing out on opportunity Y was really my fault.

Originally Posted by Apollia

I'm taking responsibility - but, in addition, I'm pointing out that there are a lot of factors besides my own actions which led to the excessively bad consequences which befell me. For instance, credit card companies greedily imposing their unfairly high late and overlimit fees and penalty interest rates to vampirically capitalize on people's misfortune, amd kick people like me when they're already down.

Taking responsibility is like being pregnant, you can't be half pregnant. You either are or you aren’t. Maybe that is a little bit harsh, but without that type of attitude you are able to blame someone else besides yourself. This allows self pity and it deprives you of the power of yourself.

The reason I am not responding to the comment about child support is because my previous comments apply.

Originally Posted by Apollia

I really don't think any teenager (or even any adult) who makes a few dumb mistakes should, as a result, be forced to give 25% of their wages to some credit card companies for the rest of their life. (Which is probably what would happen to me if I were still willing to pay, since I think it is rather unlikely that I will become financially prosperous enough to ever entirely pay off my so-called "debt" - if it can even be called debt, when it mostly consists of usurious fees and interest and relatives' debts placed in my name, rather than charges I made for my own expenses).

Is this not a defeatist attitude?

Oh, and it is your debt, you signed the document take responsibility for your actions.

Would Steve Pavlina give up to life long servitude to the credit card companies or would he find a way to get out of it? Not to make light of your financial situations, but I would wager that there have been people who had more debt with less ability then you and were still able to escape out from it.

I am curious to see how dire your situation is. Would you be willing to share the exact specifics either publicly or via pm? Or you might want to try reading getrichslowly.org, that site has a lot of helpful tips for getting out of debt.

[fountainAtlas]

Originally Posted by ThoughtAddict

So, we should focus on and move toward a system that uses the good sort of charity and eliminates abuses, no?

Agree. But, that assumes that their can be a system for donating large amount of charity that is predominately good.

[fountainAtlas]

Originally Posted by Apollia

If I were rich, I would be constantly haunted by the thought of all the starving, miserable people in the world (especially children) whose lives I could almost effortlessly save just by using my wealth. I would never have any peace unless I did something about it. Even now I feel guilty for not being able to do more.

By reading the above I got the impression that you may have an issue with success. For you feel guilty for everything you have. I suspect if you earn your money, that guilt would diminish. But without removing some of that guilt it will be hard for you to proceed with confidence, which seems to be a very important element in achieving success.

Originally Posted by Apollia

As for a more selfish reason why people should rescue the poor - there are probably tons of talented artists, musicians, writers, inventors, etc. who end up destroyed by poverty in various ways, such as by their lives being cut short by preventable ill health, or by being driven to despair and suicide. At best, these artistis, etc. might end up wasting so much time working at a mindless job that they don't produce as many creative works as they otherwise would be able to. Any art, music, literature or technology lover, even one who is a non-humanitarian, should find that to be reason enough not to abandon everyone to near-slavery and misery.

Many artist derived their insperation from their misery, would you want to deprive society of Picasso's famous Blue period?

Originally Posted by Apollia

It's hard for me to be grateful for more rope to hang myself with. Or more leashes to tether me to unwanted masters and give them power over me no one in a free society should have over another human being.

We, as the common people, have far more freedom now then we ever did. We have few people to blame for when we choose to enter into bondage. But it is a bit naive to think that we live a free society. As long as there is scarcity, we will not be Free.

Originally Posted by Apollia

Fortunately, though, I don't have that problem anymore - my credit report is probably so destroyed after being in default for about a year, I'm pretty sure it would be very difficult for me to find a loan or more credit even if I wanted to look.

Why give up so easily?

Originally Posted by Apollia

Except you can be thrown in jail due to owing child support or taxes, at least in the USA.

This is a whole other topic. But you only pay taxes when you make money. Keep in mind that taxes paid for the road that you use to get to work, among other things. The internet came out from public universities trying to communicate better with one another; those universities were in part funded by public funds and thus taxes. The government is not all bad.

Originally Posted by Apollia

(The thing I found pointless about that job was the fact that that job did hardly anything to improve the world at large. Although, since my boss was a nice guy, I'm not unhappy that I saved him some money in the time I was there. He said I did the work of three people, by the way - so, lest there be any doubt, I just wanted to mention that, to show I am definitely capable of being productive ).

Sometimes you need to crawl before you walk.

Originally Posted by Apollia

You sound like you have no problem with inheritance, though - despite the fact that inheritance is often thought to produce much the same results, "spoiled rich kids", etc.

Many of them will lose what they inherited. Now that is justice

"I wish everyone had a huge inheritance. " Becareful what you wish for.

Originally Posted by Apollia

If _I_ shock you, what do you think about Steve's article, 10 Reasons You Should Never Get a Job?

Thanks for inspiring me to write these messages, it was fun. I hope it helps make my views more understandable and less disturbing to you.

Best wishes,
Apollia

Not sure how that article relates to the discussion, but then again I do not think I have ever written as much as I have right now. I am exhausted.

-FountainAtlas

[Apollia]

Hi. I'm surprised I wrote so much so quickly. It happens sometimes. If only I were consistently this inspired to write - I could maybe thrive in a career involving writing.

Originally Posted by fountainAtlas

Good we agree.

Cool.

I suspect you and I can have a great discussion on taxes and how they relate to charity,

Yes.

but for now I am going to limit myself to the topic at hand.

OK.

Yes. I believe there are a lot of people like that.

Oh, yeah, I forgot. They're called masochists.

They believe that their suffering is in itself a virtue and thus they deserve charity form those who have more than them.

Suffering isn't a virtue, but I think cruelty, or simply not caring about what happens to people, etc. are terrible anti-virtues, & I can't really blame anyone for thinking they deserve better than to be treated with cruelty or callousness.

Though, of course, that doesn't mean poor people should obnoxiously demand gifts from people who aren't much better off than themselves, or even people who _are_ much better off than themselves. Just like anyone else, they should ask nicely if they want something.

And, if poor people receive nothing, they probably shouldn't assume they're being treated cruelly or callously. People who aren't charitable have their reasons which ought to be respected even if they're wrong, and especially if they're not wrong.

While, understandable, but are you sure you aren’t just making excuses for your actions?

Well, just giving reasons, not excuses, hopefully.

What I was trying to get at was what would happen if debt wasn’t available to you when it was the "lesser of two evils"?

Somewhere in my previous reply to you, I already explained what I think probably would have happened if debt had never been an option in my life.

I do not know how to get my point across so I apologies in advance if I offend.

No problem, no offense perceived.

It seems to me that you make excuses for your situation.

It's a pity that giving reasons can often seem so much like giving excuses.

The pressures of life and the weight of circumstances forced you into debt and now the pressure of debt continues to force you into your present situation.

Came close to forcing, at least. My choices were still choices (as stupid as they were).

If you, like I said before, try to take responsibility (both mentally and physically) the outcome may be better.

Thanks. I think I'm doing that, I'm definitely not just sitting around hoping things will change, nor doing nothing but complaining and hoping to be rescued, etc.

I had a similar problem of saying that event X caused me to miss opportunity Y. That was until I realized that there were A, B, and C that I could have done to mitigate X. Thus, me missing out on opportunity Y was really my fault.

Hmm... as nice in some ways it might be to believe I have that much control over everything that has happened & might ever happen to me, I think the way to nip that argument in the bud is to trace everything back to the beginning and ask, did I choose to be born?

I rather doubt the answer is yes (unless maybe the soul exists and there's some truth in the idea that people choose their parents and/or pre-plan their earthly existences) - so, that's quite possibly at least one thing that happened to me that wasn't under my control and hence isn't my fault.

Taking responsibility is like being pregnant, you can't be half pregnant. You either are or you aren’t. Maybe that is a little bit harsh, but without that type of attitude you are able to blame someone else besides yourself.

If people only blame themselves when other factors are partially to blame, then, the system will never be changed. Instead of trying to make things better for the world at large, people will strive to adjust themselves uncomplainingly to their miserable circumstances, to make themselves more and more tolerant of nonsense I think no one should put up with, & which no one should ever have to put up with.

This allows self pity and it deprives you of the power of yourself.

Actually, I view it differently. I think refusing to shoulder all the blame allows you to have a clearer view of how things came to pass, and to find better solutions than just increasing your tolerance for various objectionable things like usurious credit card fees, etc.

Is this not a defeatist attitude?

Yes, the way I wrote the paragraph you're replying to, it is, but, I probably should have worded that a different way, since I meant something a bit different.

I think in my current circumstances, of having decided to stop paying, I probably have a much better chance of becoming prosperous now that I'm no longer constantly turning over most of the money I make to pay debts, and could theoretically build up some savings much faster (as long as I don't keep them in a bank, since my bank account could probably be levied). In this situation, I feel like there's a much better chance my life will get better.

However, if I had decided to keep paying - or decide to go back to paying - then, I think I will probably have a much more difficult time and might never dig my way out of debt, particularly not working at a low-wage job with 25% of my wages possibly being garnished, etc.

Especially since paying those overinflated so-called "debts" depresses me and makes me feel like a complete sucker. (So I stopped, and now I feel much better. )

Oh, and it is your debt, you signed the document take responsibility for your actions.

Give me freedom, or give me debt...

Sorry, I had no good retort to this quote, so I just made a stupid pun.

Would Steve Pavlina give up to life long servitude to the credit card companies

I'm definitely not giving up to lifelong servitude to the credit card companies. I've stopped paying, and I'm trying to figure out how to earn money as a non-employee so my wages can't be garnished.

or would he find a way to get out of it?

No doubt, he'd find a way out. However, I actually tend to regard Steve as being not merely smart, but as some kind of amazing super-genius who achieves results far better than most people can realistically be expected to achieve.

Not to make light of your financial situations, but I would wager that there have been people who had more debt with less ability then you and were still able to escape out from it.

Thanks, I'm flattered you consider me to have ability.

I am curious to see how dire your situation is.

Not that dire, or I wouldn't be spending so much time writing and posting replies to this message board instead of devoting myself exclusively to more profitable pursuits.

Would you be willing to share the exact specifics either publicly or via pm?

Sure. It's not too complicated. I live with my family, with free housing, food, etc. I don't drive because it costs too much money. I help my family out with computer stuff, website stuff, proofreading, shopping, cleaning, looking after my sister, etc. I even wrote a little computer program in Perl to make it easier for my step-dad to create billing invoices for his job, which over time has probably saved my step-dad from days of extra work, since he used to have a far less efficient, not so automated system for creating invoices.

Before I defaulted with my credit cards in July or August 2007, my balances were about $5,000 on a Capital One card and about $5,000 on a Providian card, the interest being somewhere around from $70 to $100 per card per month (even before I defaulted), if I recall correctly.

The late/overlimit fees are something like $39 apiece. Might instead be $30 or $35 for a couple of those fees, not sure, but it's too much trouble to check into this, so, I'll just round it off and assume $39 for all of them. This comes to a total of about $78 per card or somewhere around $156 per month for both of them, on late and overlimit fees.

I'll do a low estimate of the interest even though it's doubtless increasing as a result of all the fees, and penalty interest rates. $70 per card is $140 per month in interest (though it's actually probably considerably more). $140+$156=$296 additional "debt" per month.

I haven't checked lately, but, I estimate that in approximately 12 months of being in default, my balances have probably risen from about $10,000 total to probably around $13,000, just from the fees and interest - quite possibly a lot more since I'm doing a low estimate. It might be more like $14,000 if the interest is closer to $100 per card per month; and also, I haven't taken into account the fact that the interest has probably been increasing each month as the balances have been rising.

I avoid using the bank because my bank account could probably be levied, and, becoming an employee is even less appealing to me than it was before, owing to the fact that my wages could probably be garnished.

I also think what the credit card companies are doing with these fees and interest probably ought to be against the law, so, I don't think I'd be willing to pay them even if I had the means. I'd much rather work on making those fees, etc. against the law, or encourage the credit card companies to go easier on people by organizing a boycott.

I'm guessing probably doing web-related stuff and programming are my best tickets out of this mess. I might end up trying to follow in the footsteps of Steve and others by having a blog. (But it probably won't be on personal development/self-help topics, that would be too ironic, for an unsuccessful person like me to write on such topics )

[Apollia]

Originally Posted by fountainAtlas

Or you might want to try reading getrichslowly.org, that site has a lot of helpful tips for getting out of debt.

Thanks.

Originally Posted by fountainAtlas

By reading the above I got the impression that you may have an issue with success.

Quite possible.

For you feel guilty for everything you have.

Well, to an extent, but the guilt isn't paralyzing. I try to do my best, that's all anyone can do.

I suspect if you earn your money, that guilt would diminish. But without removing some of that guilt it will be hard for you to proceed with confidence, which seems to be a very important element in achieving success.

Well, I guess I'll just see what happens...

Many artist derived their insperation from their misery, would you want to deprive society of Picasso's famous Blue period?

I'd rather let Picasso decide that.

We, as the common people, have far more freedom now then we ever did.

Yes.

We have few people to blame for when we choose to enter into bondage.

Fewer, yes.

But it is a bit naive to think that we live a free society. As long as there is scarcity, we will not be Free.

True.

Why give up so easily?

Debt got me into this mess, so I figure more debt probably won't get me out.

This is a whole other topic. But you only pay taxes when you make money.

Yes, true. The only trouble I got into was when I was charged a $25 fee in the year I didn't file an income tax form with my town because I thought it was probably unnecessary unless you actually _had_ an income. But no, they made up some dumb rule where every adult, regardless of how much income they have, has to file a tax return or pay a $25 fine (or $50 on subsequent late returns). Those fiends...

Keep in mind that taxes paid for the road that you use to get to work, among other things. The internet came out from public universities trying to communicate better with one another; those universities were in part funded by public funds and thus taxes. The government is not all bad.

Definitely, it's better than no government.

Many of them will lose what they inherited. Now that is justice

I disagree - justice (at least the nasty eye-for-an-eye kind) would be if they put someone else into poverty and then ended up in poverty themselves. But if they were simply born rich, that's not a crime.

"I wish everyone had a huge inheritance. " Becareful what you wish for.

Yes, it was a sort of thoughtless wish. I can think of some ways it could maybe turn out to be bad...

Not sure how that article relates to the discussion,

Well, I mentioned it since you seemed averse to people not working, and that's what the 10 Reasons You Should Never Get a Job article shockingly advocates, sort of. Except, that article doesn't recommend being completely unproductive - so maybe it wouldn't shock you that much after all.

but then again I do not think I have ever written as much as I have right now. I am exhausted.

-FountainAtlas

Oops, sorry about that. I've had a lot of practice discussing things at ridiculous length on the internet. No problem if you don't want to keep going, I wouldn't mind stopping either, forums (and the internet in general) are highly distracting for me, and I really can't say I have nothing better to do.

[Apollia]

I'm still not out of wind yet. Sorry.

Regarding welfare: I don't know too much about welfare because I've never been on it (at least not the government-supported kind). But, from what I've heard, it sounds like some forms of it in some countries tend to discourage people from working, because if you work and are pushed above a certain income level, your welfare benefits are taken away. So, if your job doesn't provide you enough money to live on, then it's more logical not to work.

That's one reason why, instead of welfare, I prefer Richard C. Cook's idea of (if I recall/understand it correctly) an unconditional cash stipend for every citizen. Here are a couple of his incredibly interesting articles on monetary reform, debt, poverty, usury, etc.:

An Emergency Program of Reform for the United States

Monetary Reform and How a National Monetary System Should Work

I originally mentioned those articles in a thread I posted a while ago which I unfortunately began to neglect, maybe because I'm a lazy poor person. Just thought I'd point that thread out in case it's of interest to anyone:

An Emergency Program of Monetary Reform for the United States

Originally Posted by fountainAtlas

Further, my jaded view is probably the result of me not receiving charity, when I felt I should have.

That's awful. Sorry to hear that. I'm glad you were able to get by without it and hope things are much better now.

Originally Posted by Lauxa

Has anyone looked into LETS (Local Exchange Transaction System)? It markets itself as a self-regulating usury-free "currency".

Not yet, but, it sounds interesting.

Best wishes,
Apollia

[fountainAtlas]

I am not ignoring the other parts of your posts; I will get to them tomorrow when I have a little bit more time.

Originally Posted by Apollia

Sure. It's not too complicated. I live with my family, with free housing, food, etc. I don't drive because it costs too much money. I help my family out with computer stuff, website stuff, proofreading, shopping, cleaning, looking after my sister, etc. I even wrote a little computer program in Perl to make it easier for my step-dad to create billing invoices for his job, which over time has probably saved my step-dad from days of extra work, since he used to have a far less efficient, not so automated system for creating invoices.

Good for you.

Originally Posted by Apollia

I haven't checked lately, but, I estimate that in approximately 12 months of being in default, my balances have probably risen from about $10,000 total to probably around $13,000, just from the fees and interest - quite possibly a lot more since I'm doing a low estimate. It might be more like $14,000 if the interest is closer to $100 per card per month; and also, I haven't taken into account the fact that the interest has probably been increasing each month as the balances have been rising.

I am going to assume that you live in USA.

At $6.55 an hour the current minimum wage in America, you would be able to gross, $13,264 a year working 40 hours a week, before taxes. After Medicare and social security you would have $12,249.30, from this you would have to pay federal taxes of about 8% (if your parents claim you as a dependent), leaving about $11,270, cut off another 2% for state and another 3% for conservatism on my calculations and you get take home pay of about $10,700 or $891 a month.

Assuming you have 13k in debt at 30%, you can pay it all off in 5 years and still be able to save over $470 a month. If you apply the total 891 to reducing your debt you can be debt free in about 18 month. If the interest rate is lower or you can make more a month, you can be free even quicker.

I did this to show you that you can be free if you are willing to work. Further, there are many ways to reduce your rates which would allow you to pay this back even quicker.

Originally Posted by Apollia

I also think what the credit card companies are doing with these fees and interest probably ought to be against the law, so, I don't think I'd be willing to pay them even if I had the means. I'd much rather work on making those fees, etc. against the law, or encourage the credit card companies to go easier on people by organizing a boycott.

I have had at least one credit card since the age of 16 and in that time(8 years) I have paid not a single penny in finance charges (I have paid 30 dollars for annual fee card). I use my credit cards daily and pay off the balance in full every month. Again you signed the agreement and it is well within your means (If you have health issues that I am not aware of that would prevent you from holding a min wage job then I retract my comment) to pay off the debt, you just don't want to, because you feel it is unjust.

Great discussion I will try to write more tomorrow.

[Apollia]

Originally Posted by fountainAtlas

Good for you.

Yes, I just thought I'd better show I'm not completely useless/unproductive.

I am going to assume that you live in USA.

At $6.55 an hour the current minimum wage in America, you would be able to gross, $13,264 a year working 40 hours a week, before taxes. After Medicare and social security you would have $12,249.30, from this you would have to pay federal taxes of about 8% (if your parents claim you as a dependent), leaving about $11,270, cut off another 2% for state and another 3% for conservatism on my calculations and you get take home pay of about $10,700 or $891 a month.

Assuming you have 13k in debt at 30%, you can pay it all off in 5 years and still be able to save over $470 a month. If you apply the total 891 to reducing your debt you can be debt free in about 18 month. If the interest rate is lower or you can make more a month, you can be free even quicker.

I did this to show you that you can be free if you are willing to work. Further, there are many ways to reduce your rates which would allow you to pay this back even quicker.

Thanks. I didn't realize it might possibly take only a year and a half.

I have had at least one credit card since the age of 16 and in that time(8 years)

Ah, you're younger than I thought. Younger than me, it seems.

Great, that means now I can tell you things like, "Now listen to me sonny, respect your elders"...

I have paid not a single penny in finance charges (I have paid 30 dollars for annual fee card). I use my credit cards daily and pay off the balance in full ever month.

Excellent. I'm in favor of a credit card boycott but paying off your balance in full every month is the next best thing, in my opinion.

Again you signed the agreement and it is well within your means (If you have health issues that I am not aware of that would prevent you from holding a min wage job then I retract my comment) to pay off the debt,

Nothing but insomnia, I guess. As tormenting as it is, having a looooow threshold for boredom isn't exactly a health issue...

you just don't want to, because you feel it is unjust.

Precisely.

Great discussion

Yes, I'm enjoying this too.

I will try to write more tomorrow.

OK then.

Best wishes,
Apollia

[fountainAtlas]

Apollia,

I think our discussion can be summarized by:

I hold the view that though you cannot control all of your circumstances, there are enough things that an able body person can control to shape your future. From my perspective it doesn't seem like it is impossible for you to get out of debt and continue to work on your projects.

Why not work at a job, pay off your debt (which I suspect would make you feel great about yourself) and use your free time to expand your business. Most intelligent people have a low threshold for boredom, because learning is far more interesting than doing. I love to learn and think. I think Steve wrote an article about the value of ideas and the conclusion was that ideas without execution are worth very little. Sure, there are some great awe inspiring ideas that are worth a lot just as ideas themselves, but those are exceedingly rare (once a generation rare).

There are 168 hours in a week, what do you do with your time? I would have no problem sharing with you how I spend my 168 hours, I’ll summarize that I am far less productive than I can be. I use the snooze button, I nap, when I should work, I watch a few too many movies, I don’t read enough, I eat out too often, this list goes on and on and on. But, year over year there is improvement.

I am sure you were the kid who everyone told that you have a lot of potential. I am a very lazy person, but I find that sometimes by forcing yourself to do things you don’t want to, your life improves dramatically. Always keep in mind for ever success story like Steve (who gave it all) there might be 10 people who are broke, destitute, and possibly dead. In life we only see the great successes and not always the failures.

If there is a non-financial way that I can help, I would be glad to. Maybe, I can help you set up a debt repayment plan?

: Full Disclosure: I work in the finance industry, though not in credit card or retail banking.

Good luck to you regardless,

-FountainAtlas

[Apollia]

Thanks for your reply. You seem to be a very nice person.

Originally Posted by fountainAtlas

I hold the view that though you cannot control all of your circumstances, there are enough things that an able body person can control to shape your future.

I agree, this is reasonable.

From my perspective it doesn't seem like it is impossible for you to get out of debt and continue to work on your projects.

Thanks again for making it clearer to me. I really didn't realize how close within reach paying off my debt might be, even with a minimum wage job, etc. Despite my loathing for credit card companies the thought of having all that debt be truly gone is tempting.

There are 168 hours in a week, what do you do with your time? I would have no problem sharing with you how I spend my 168 hours, I’ll summarize that I am far less productive than I can be.

Same here. I read (usually the internet but sometimes books too), write, listen to music (usually while working on other stuff), program (my major project has been a web links organizer/file organizer program written in PHP/MySQL which I'm going to release as free, open source software on my website once it's done), try to stop myself from avoiding programming, clean, try to get more organized (my program has been very useful for that so far), etc. That all might sound more productive than it really is...

I think I at least have the three programmers' virtues in abundance.

I am sure you were the kid who everyone told that you have a lot of potential.

Yes, I'm sure you were too.

I am a very lazy person,

One of the programmers' three great virtues. I bow to you.

but I find that sometimes by forcing yourself to do things you don’t want to, your life improves dramatically. Always keep in mind for ever success story like Steve (who gave it all) there might be 10 people who are broke, destitute, and possibly dead.

Definitely.

If there is a non-financial way that I can help, I would be glad to.

Thanks, I appreciate it. Same here, if you ever need some web design done, or free, open source, public domain software written, like a Perl script, or something written in PHP/MySQL or JavaScript, or anything else I can do, I'd be glad to. I'm not an expert at this stuff but I can do a little bit.

Maybe, I can help you set up a debt repayment plan?

Thanks for the offer, but I decline. Unless a deal could be worked out where the late/overlimit fees are all subtracted, along with all of the extra interest that resulted from those fees, with the penalty-rate interest being lowered and also subtracted from my balances (though I could accept reasonable interest for the year I didn't pay being added to my balances in place of the high interest), I'm unlikely to be satisfied with any plan.

Good luck to you regardless,

-FountainAtlas

Good luck to you too!

Best wishes,
Apollia

[jaamkie]

interesting though all of your personal finances are... you seem to take a lot for granted that is actually inextricably linked to our system of debt and interest.

#1- you are expecting everyone to personally know and invest in the businesses of people they can trust to voluntarily provide them with dividends from their investments- this is outrageous!!! it would totally perpetuate the system of networking and personal connections that already creates an elite in the US, and the US/EU as a whole as an elite separate from the developing world.

The point of loans and interest and the accompanying laws is to advance capital to the individuals/businesses most able to use it to create the most value for society. If an individual/business is stupid enough to throw away the money on consumption rather than investments (exchanging money for whatever you expect to create more money in the future), well then I guess it's hard to say who's at fault- the recipient of the loan for not investing in something that will generate income to pay it back, or the loaner who loaned without realizing that the money would be consumed instead of invested...

I think both are culpable, you want to discourage both wasteful lending and wasteful borrowing- unfortunately due to lobbyists->laws I think we lean too hard on the borrowers (usually poor) to benefit the loaners (the rich); but I don't think you can say either is innocent!

#2- You speak as if people have a right to unlimited money. But money is just a medium of exchange for general value to society- you seem to imply that people should be allowed to take and take without ever being required to give back. The point of loans is to allow someone to take in advance in anticipation of giving back in the future, and someone else to give in anticipation of taking in the future (i.e. retirement, to store future inheritences, generally because they know someone else can use the money more efficiently than they can at that time). If you allow everyone to take without giving back, well then everyone will rationally take all they can and give nothing back and soon there will be nothing of value at all!

The success of capitalism rests upon the fact that to be wealthy/powerful you have to create value (at least in theory/general- duh the system isn't perfect, and we need regulation to try to improve on market failures such as health care).

#3- The point of money is to provide a medium of exchange. To speak of money as if it has some inherent value is to assume zero-sum thinking- to assume there is only a finite amount of value that can be created and exchanged. The money supply should in theory expand in tandem with the expansion of value created by society. If it expands too fast, as it has tended to do, there is inflation- a unit of money becomes worth less and less units of value; otoh if it expands too slowly (relative to expansion of value), a unit of money becomes worth more and more units of value (deflation- also a bad thing).

It is difficult to directly create money when/where value is created, so we try to set up systems like the Fed to indirectly create/inject money as it is justified by the economy. I agree the Fed is far from perfect, but the basic premise- releasing money into the economy while monitoring feedback (inflation), makes a lot of sense.

#4- Taxes and government spending: you speak as if they aren't linked- which is false, despite what Bush and Reagan liked to pretend. National debt is in theory no different than personal/corporate debt- it should be taken on to invest for future earnings, not taken on to fund wasteful consumption. A deficit makes sense if the deficit is being spent on things that will pay taxes with interest in the future- building education, health care, infrastructure, rule-of-law/justice, funding basic scientific research, balancing irrational market fears (i.e. New Deal spending), even caring for the environment (to an extent)- things that promote sustainable economic growth. A deficit makes no sense when it is being wasted on further destruction (Iraq...), not invested at all; yet the public doesn't seem to make the proper distinction...

Taxes are necessary to fund government spending; some level of government spending is certainly in the average citizen's best interest- to pay for police and a judicial system, to build infrastructure, to educate all children (future workers)... the edges can be debated, the extent of government responsibility can be debated (healthcare? welfare? social security? "defense" policy?), but the basic fact that government must collect money from citizens to pay for projects of general concern is indisputable.

The next question is how to equitably and efficiently collect the money? We say the rich should pay the most- and in the US they do, by far- percentage as well as absolute dollars... Yet we also say that we should tax things that are a net drain on society (consumption) rather than taxing things of benefit to society (work/investment), since taxation reduces the incentive for whatever action is being taxed- but sales taxes are regressive! I do agree the tax code has all sorts of egregious special interest rules, but I don't have a simple answer to fix the tension between efficient and fair taxation and I doubt you do either.

[schola]

Charging money to use money...hmm it almost seems like a paradox.

I have some issues with it.

Because its main purpose throughout history has been to take property and create slaves, it seems like there may be something that's "not right" about usury.

One problem is, money isn't really real. It's just a concept. And there are differing definitions of money, what makes good money, etc. I think part of the reason that usury is considered OK is this confusion over what money really is.

Since it helps to use metaphors or analogies to understand difficult concepts, I'll throw one out there for anyone who wants to take a crack at it:

If a person borrows a certain amount of "something" from you, how can you ask a person to bring back more of that thing than what you gave him in the first place?

Consider for a moment that we live in a barter system without any money. We are both farmers and I lend you my cow. Would you sign the contract if I required you to bring back more than one cow (charge interest)? You would probably think that was unfair. You'd say, "That's why I'm borrowing the friggin' cow in the first place you dummy! Because I don't have enough."

It doesn't make sense to make a person bring back more of the same thing he borrowed, does it? But that's what usury is.

What if it was something that is only useful if it is consumed, because that is true about money. Money isn't useful until you spend it. Food is only useful if you eat it, so maybe that is a good example.

Now here's where it really gets weird. Let's say I borrow 5 apples from you. It already seems weird, borrowing food? How can I do that? Once I eat those apples, they're gone. I can't return something that disappears when I use it and the whole point of borrowing is so I can use it.

On top of this, you decide to charge me interest in the forum of 1 apple a month for every month that I don't bring your 5 apples back. Now this is REALLY starting to sound like a raw deal. No thanks.


Back in middle school, kids always used to say, "Can I borrow a piece of paper?" Sometimes I'd get smart and say, "Borrow? Are you gonna give it back when you're done? "

They knew what I meant of course. They were going to use the paper and turn it in, so there's really no way I could expect them to give that same piece of paper back.

Borrowing a pencil is a different story though. You can get use out of it without destroying it. So you can borrow a pencil.

*Can you get anything useful out of money without spending it?* Then how can you borrow it?

Based on those scenarios, here's my opinion:

It's not that usury is right or wrong per se, it's that no one in their right mind would agree to borrow money at interest if they really understood what they were agreeing to.

[jaamkie]

Originally Posted by schola

Charging money to use money...hmm it almost seems like a paradox.

I have some issues with it.

Because its main purpose throughout history has been to take property and create slaves, it seems like there may be something that's "not right" about usury.

One problem is, money isn't really real. It's just a concept. And there are differing definitions of money, what makes good money, etc. I think part of the reason that usury is considered OK is this confusion over what money really is.

Since it helps to use metaphors or analogies to understand difficult concepts, I'll throw one out there for anyone who wants to take a crack at it:

If a person borrows a certain amount of "something" from you, how can you ask a person to bring back more of that thing than what you gave him in the first place?

Consider for a moment that we live in a barter system without any money. We are both farmers and I lend you my cow. Would you sign the contract if I required you to bring back more than one cow (charge interest)? You would probably think that was unfair. You'd say, "That's why I'm borrowing the friggin' cow in the first place you dummy! Because I don't have enough."

It doesn't make sense to make a person bring back more of the same thing he borrowed, does it? But that's what usury is.

What if it was something that is only useful if it is consumed, because that is true about money. Money isn't useful until you spend it. Food is only useful if you eat it, so maybe that is a good example.

Now here's where it really gets weird. Let's say I borrow 5 apples from you. It already seems weird, borrowing food? How can I do that? Once I eat those apples, they're gone. I can't return something that disappears when I use it and the whole point of borrowing is so I can use it.

On top of this, you decide to charge me interest in the forum of 1 apple a month for every month that I don't bring your 5 apples back. Now this is REALLY starting to sound like a raw deal. No thanks.



Based on those scenarios, here's my opinion:

It's not that usury is right or wrong per se, it's that no one in their right mind would agree to borrow money at interest if they really understood what they were agreeing to.

no no no!!!! You miss the point of loans- as do seemingly most Americans- the source of a lot of current economic pain and past market bubbles... In one sense I totally agree- borrowing/loans to fund consumption is nonsensical- credit card debts without a particular plan are absolutely awful (short-term, credit cards also serve a useful purpose as more secure cash-substitute if you pay them off each month so don't mean to totally disparage...). If you "borrow" apples to just eat them and sit on your ass some more, I agree the whole thing might as well be called a gift or theft depending on circumstances.

The point is if you use money to make more money- if you borrowed a cow to breed it and sell the milk (rather than "borrowing" to slaughter and eat it) a farmer would be perfectly justified in expecting a cow plus a calf in return for the loan of a cow for a year (or something... no idea about the particular economics of cows and whether a calf would be fair interest- maybe you'd end up with joint ownership of the calf? or shared profits from the sale or slaughter of the calf? ugh as a vegan the whole thing turns my stomach...) But this is also the point of money- to be able to split ownership and share profits without requiring direct barter- the farmer might prefer a cash interest payment rather than a percentage ownership of a calf... universally accepted cash vastly simplifies trade scenarios- we have a hard time even imagining them requiring everything settled up in real useful property instead of cash.

[Apollia]

Originally Posted by jaamkie

interesting though all of your personal finances are...

Sorry about that. I wouldn't have gotten into so much detail about that if I wasn't asked.

#1- you are expecting everyone to personally know and invest in the businesses of people they can trust to voluntarily provide them with dividends from their investments- this is outrageous!!!

Yes, that's why I said somewhere in a previous post that investors would probably need some recourse to assure that unscrupulous business owners wouldn't withhold profits that rightfully belong to the investors.

The point of loans and interest and the accompanying laws is to advance capital to the individuals/businesses most able to use it to create the most value for society.

I doubt most lenders see it that way - I think most lenders lend money simply so they can make money, and the issue of whether or not what they're doing and how they're doing it is creating maximum value for society as a whole doesn't cross their minds nearly as often as it ought to.

I doubt most lenders (especially the most predatory lenders) think very much at all about how their unfair and excessively usurious policies harm society, or, if they do, they simply don't care as long as they're still making heaps of money.

I think both are culpable, you want to discourage both wasteful lending and wasteful borrowing- unfortunately due to lobbyists->laws I think we lean too hard on the borrowers (usually poor) to benefit the loaners (the rich); but I don't think you can say either is innocent!

I agree.

#2- You speak as if people have a right to unlimited money. But money is just a medium of exchange for general value to society- you seem to imply that people should be allowed to take and take without ever being required to give back.

I don't believe coercion is necessary to make people give back to society and create valuable new things. I also think a free society should involve as little coercion as possible.

If you allow everyone to take without giving back, well then everyone will rationally take all they can and give nothing back and soon there will be nothing of value at all!

I quite doubt that. There are lots of people who are wealthy enough to be able to do absolutely nothing productive at all for the rest of their lives, and yet they create great new stuff all the time without being forced to.

It is difficult to directly create money when/where value is created, so we try to set up systems like the Fed to indirectly create/inject money as it is justified by the economy. I agree the Fed is far from perfect, but the basic premise- releasing money into the economy while monitoring feedback (inflation), makes a lot of sense.

(...)

Taxes are necessary to fund government spending; some level of government spending is certainly in the average citizen's best interest- to pay for police and a judicial system, to build infrastructure, to educate all children (future workers)... the edges can be debated, the extent of government responsibility can be debated (healthcare? welfare? social security? "defense" policy?), but the basic fact that government must collect money from citizens to pay for projects of general concern is indisputable.

Well, I'm sure someone better-informed than I am will probably jump in here and explain exactly why these things are disputable, so, I'll just leave that task to them.

I do agree the tax code has all sorts of egregious special interest rules, but I don't have a simple answer to fix the tension between efficient and fair taxation and I doubt you do either.

"Fair income taxes" seems like an oxymoron to me. How is it fair for anyone to arbitrarily insist that they can forcibly take from you the money you rightfully earned? The only way I see to make income taxes fair is to get rid of them entirely - a simple, straightforward enough solution, though doubtless the implementation of it probably wouldn't be quite as simple and straightforward. (Oh, wait, come to think of it, another possibility besides getting rid of them would be to make income taxes truly voluntary).

I think Ron Paul may have explained in his book somewhere how ceasing the income tax could be safely done by cutting back on spending. (Not sure; I don't have his book on hand, unfortunately). If I recall correctly, he mentioned that America has a military presence in 130 countries, and cutting back on that would save a lot of money. There were tons of other good ideas in that book as well, I just don't recall them off-hand.

Thanks for your thought-provoking posts, jaamkie and schola.

Best wishes,
Apollia

[schola]

Originally Posted by jaamkie

no no no!!!! You miss the point of loans- as do seemingly most Americans- the source of a lot of current economic pain and past market bubbles... In one sense I totally agree- borrowing/loans to fund consumption is nonsensical- credit card debts without a particular plan are absolutely awful (short-term, credit cards also serve a useful purpose as more secure cash-substitute if you pay them off each month so don't mean to totally disparage...).

This is subject is bigger and broader than the United States. Usury has been around for thousands of years and was banned by countless societies throughout the ages.

It comes down to understanding the true nature of "money."

If you "borrow" apples to just eat them and sit on your ass some more, I agree the whole thing might as well be called a gift or theft depending on circumstances.

That's what money is. Food. Fuel. It is the fuel of the economy.

You have to burn the fuel to get any use out of it. How can you rent fuel? You can't.

Money is the same except that no one realizes it. So the bankers are allowed to perpetuate their fraud.

The point is if you use money to make more money- if you borrowed a cow to breed it and sell the milk (rather than "borrowing" to slaughter and eat it) a farmer would be perfectly justified in expecting a cow plus a calf in return for the loan of a cow for a year

The cow produces milk and offspring (provided you have a bull too) without you having to put any sweat equity into it. It produces value on its own. That's the difference.

Money doesn't do this. Money is only a medium of exchange. It doesn't create more value just sitting in your house like the cow in your field does.

Money doesn't create value. Any value created while using the money comes from your time and effort.

But this is also the point of money- to be able to split ownership and share profits without requiring direct barter- the farmer might prefer a cash interest payment rather than a percentage ownership of a calf... universally accepted cash vastly simplifies trade scenarios- we have a hard time even imagining them requiring everything settled up in real useful property instead of cash.

You're talking about renting a cow. I have no problem with renting cows. I have a problem with renting money.

I'm not condemning money. Only clarifying what it really is.

[jaamkie]

Originally Posted by schola

This is subject is bigger and broader than the United States. Usury has been around for thousands of years and was banned by countless societies throughout the ages.

It comes down to understanding the true nature of "money."

That's what money is. Food. Fuel. It is the fuel of the economy.

You have to burn the fuel to get any use out of it. How can you rent fuel? You can't.

Money is the same except that no one realizes it. So the bankers are allowed to perpetuate their fraud.


The cow produces milk and offspring (provided you have a bull too) without you having to put any sweat equity into it. It produces value on its own. That's the difference.

Money doesn't do this. Money is only a medium of exchange. It doesn't create more value just sitting in your house like the cow in your field does.

Money doesn't create value. Any value created while using the money comes from your time and effort.


You're talking about renting a cow. I have no problem with renting cows. I have a problem with renting money.

I'm not condemning money. Only clarifying what it really is.

I understand it is much bigger than the US, the US is just the first thing that comes to mind, being a stupid American myself... also I suppose we should differentiate between "usury"- excessive abusive loans taking advantage of people with no other options; and all loans/interest... because I think we're debating interest in general- I agree "usury" in the true sense can be quite abusive, and that current US credit cards are arguably closer to "usury" than to fair interest on legit investment loans.... if you repeatedly give money to people clearly in no state to repay-with-interest then shame on you for expecting it... and doubly shame-on-you for lobbying the government to protect your abusive practices... but also the debtors shouldn't be accepting credit cards to begin with (and the fact that people are in dire straits enough to use credit cards for medical bills and etc to me points to an insufficient government safety-net; but perhaps other more conservative people would rather take the Darwinian approach?)

But what is "the true nature of money"?

To me, money is a convenient substitute for items of real value in society- for cows and apples and land and labor and knowledge and etc... And money DOES have a value over time- the value of opportunity- again, taking it purely as shorthand for the underlying items of value...

If you buy a cow today, your herd multiplies as you breed/raise them, you end up with quite a few cows in 30 years... vs if you save your money and buy a cow in 30 years you just have the single cow. Interest is a more convenient way of doing the same thing- I can invest (loan) my money now, and have a herd of money in 30 years when I want to retire; or I can save it under my pillow and just have whatever I started with... of course we do pay taxes on the gains, and fees to the people who are actively managing our herd... but essentially it is the same thing, just without the inconvenience of personal dairy herds... (btw the retirement-cows are not as farfetched as they seem- some African groups traditionally count their wealth in cows, leading to way more cows than necessary and to environmental degradation... but that's a whole 'nother topic)


Also, you CAN loan fuel! Think on-grid solar and the fluctuation between supply and demand depending on time of day/year?

[schola]

jaamkie,

There are other ways of getting your cow right now other than borrowing money for it, but I'll go over that some other time.

Just know that money isn't real. I mean, truly and totally understand that fact. It's not real. When you really "get" that, it will feel like your brain just blew up.

I used to think that "gold is money," and if you know about Austrian economics and follow Ron Paul is you might know what I mean by that, but now I realize that's a falsehood. Gold functions pretty when it represents money, but it is not money, because money isn't real.

Money is just a concept. It's a symbol. A meme. A piece of language. That's it.

If back in the old days you borrowed "money" from the bank, you were really borrowing gold coins. The "interest" on that "money" was really just your obligation to bring the banker more gold coins. Just like the apples and the cows in my other example.


I mean usury as the charging of any interest on the loaning of money. I don't like to pay for being loaned unreal things.

The problem I see with usury is that it creates a potentially unlimited obligation; meaning: the sky's the limit on how much you could potentially "owe." It increases exponentially. You owe more and more and more until you either 1) get it paid off or 2) get in over your head.

Money is truly infinite but whatever we attach it to isn't. That's the deception.

In our scenario, there are only a finite amount of coins in the world, but your possible debt is infinite. Theoretically, you could "owe" more coins than all the coins that exist. Trust me, it's designed this way.

The plot thickens when you discover that the banks control the supply of gold coins and they can make it very hard to pay off your debt to them by restricting the supply of coins.

This is turning into a condemnation of banking in general. But you should know that usury is just one facet of the whole banking scam.


On a side note, just consider this. Have you ever loaned a friend money at interest? I haven't. What kind of friend would do that? Banks aren't your friend.

[fountainAtlas]

Originally Posted by schola

On a side note, just consider this. Have you ever loaned a friend money at interest? I haven't. What kind of friend would do that? Banks aren't your friend.

Do you want a world with only barter? In such a world the concept of insurance could not exist. Insurance when done correctly improves society. There are nearly countless ways that money has allowed the world to advance itself.

Do you want a world where no money is lent?

Lastly, when I lend my friend 20 bucks for dinner I don’t charge interest. Now, if my friend asked me for $10,000 for the duration of a year. If don’t charge interest than I am losing about 400 dollars in interest income that I can make by keeping my money at bank, not the mention what it could yield in another investment. I am in the habit of buying lunch for a friend; I am NOT in the habit of giving my friends 400 dollars.

Originally Posted by schola

I mean usury as the charging of any interest on the loaning of money. I don't like to pay for being loaned unreal things.

Money is a product just like anything else invented by men.

[jaamkie]

Originally Posted by schola

jaamkie,

There are other ways of getting your cow right now other than borrowing money for it, but I'll go over that some other time.

Just know that money isn't real. I mean, truly and totally understand that fact. It's not real. When you really "get" that, it will feel like your brain just blew up.

I used to think that "gold is money," and if you know about Austrian economics and follow Ron Paul is you might know what I mean by that, but now I realize that's a falsehood. Gold functions pretty when it represents money, but it is not money, because money isn't real.

Money is just a concept. It's a symbol. A meme. A piece of language. That's it.

If back in the old days you borrowed "money" from the bank, you were really borrowing gold coins. The "interest" on that "money" was really just your obligation to bring the banker more gold coins. Just like the apples and the cows in my other example.


I mean usury as the charging of any interest on the loaning of money. I don't like to pay for being loaned unreal things.

The problem I see with usury is that it creates a potentially unlimited obligation; meaning: the sky's the limit on how much you could potentially "owe." It increases exponentially. You owe more and more and more until you either 1) get it paid off or 2) get in over your head.

Money is truly infinite but whatever we attach it to isn't. That's the deception.

In our scenario, there are only a finite amount of coins in the world, but your possible debt is infinite. Theoretically, you could "owe" more coins than all the coins that exist. Trust me, it's designed this way.

The plot thickens when you discover that the banks control the supply of gold coins and they can make it very hard to pay off your debt to them by restricting the supply of coins.

This is turning into a condemnation of banking in general. But you should know that usury is just one facet of the whole banking scam.


On a side note, just consider this. Have you ever loaned a friend money at interest? I haven't. What kind of friend would do that? Banks aren't your friend.

The fact that money isn't real IS THE WHOLE POINT!!! If it were a real physical thing, yes I could understand why one would complain that there's only a limited amount of "gold coins"; but since it is a representation of value to society, there is no theoretical limit on the total amount of money that can or should exist.

The point of loaning at interest is that society exists over time, at any point in time we are consuming value as well as creating it, and the economy- based on the exchange of money- is the system for efficiently distributing/balancing creation and consumption of value.

If we consume more than we create, we are depleting our resources- exploiting them unsustainably; while if we create more than we consume, we are generating savings- assets for the future. (Of course currently not everything of value is included in our monetary system- we don't properly value our natural resources/environment- hence unsustainable exploitation/pollution...)

So in designing our economy, we want society as a whole to create more value than it consumes- hence money creation is tied to expectations of repayment with interest. We expect that utilization of current value in society should lead to greater creation of value in the future. (In reality yes there is no way to force someone to be productive; however our systems seem to usually coerce most people to contribute most of the time- and the better we can do that, the more efficiency we can get out of people, the higher average standard-of-living we will achieve as time passes.)

This is why many people such as myself, while appreciating interest in the real sense, are angered by the use of credit/loans for consumption rather than investment- loans should be structured to be paid off over time, should only be made when there is a reasonable expectation that they will be used to generate income in the future. If they don't follow these rules, then yes they are really gifts/charity/shams and ought to be called such, instead of this bizarre fantasy that people will conjure value out of nothing after maxing out credit cards and home equity loans to just consume. (and I blame both the consumers and society/governance for the fact that many people seem unable to generate enough income to sustainably pay as they go)


And I do understand that at a basic level, the Fed only creates money along with the expectation that it will receive more money back than it has created- which duh is impossible. But there is no final reckoning, no day of judgement; and as you said, money IS NOT REAL- it is a collective fantasy to represent the total value available to society for consumption. Also as you said, a cow does naturally increase in value if managed appropriately (though in a larger way we are all ultimately dependent on energy from the sun; but as they say "in the long run we're all dead"), so we create money mirroring this reality- we only create money if the recipient expects that they will use that value from society to generate additional value(money) in the future.

---

The point of "friendship" is that you reciprocate gifts/favors due to a slowly-developed bilateral trust... you loan without interest out of trust that the favor will be remembered and reciprocated. Obviously this doesn't scale, and we need a system to allow fair loans despite no previous contact- hence the concept of interest and contracts and a judicial system to enforce them.


And I am curious how you plan to get your cow without any prior assests (including intangible assets such as personal relationships or reputation) and without any obligations (explicit or implicit) of repayment beyond the cow itself to compensate someone for the time and risk of giving you the cow?

[Lauxa]

I have loaned money to a friend at interest. This friend has irregular income and is frequently short of money. This friend currently has about $3000 in loans from me and I have a contract saying that it will be returned with interest. Of course, I would not try to enforce the contract through the legal system, although if he died suddenly I might try to get a check from the life insurance company.

This is one of the reasons I started the thread, because of wondering about the ethics of this kind of situation. If I hadn't loaned him the money, perhaps he would have been evicted. If I don't charge interest, I feel shorted because I could have put that money into investments that would have earned me a return. Right now I could really use that $3000 to invest in my business.

But after reading some of the replies I feel at least a little justified that at least I am loaning him money that I actually have rather than money-created-out-of-thin-air like the banks do.