< HOME  Sunday, November 20, 2005

Take Your Cheap Rhetoric And...

...keep the change. :)

A proponent of interest recently asked me:

"Why don't you just come right out and say to which particular ideology you subscribe to... Socialist? Anarchy? Anarcho-Capitalist? Communist?"

He and others like him would like to peg me as 'socialist' or 'communist,' or what have you, so that they can dismiss me out of hand.

But, I am not.

If you don't like my views on interest, then debunk my argument, if you can.


At Sunday, November 20, 2005, Anonymous Anonymous said...

A proponent of interest recently asked me

Heh.. I am as much a proponent of interest as i am a proponent of my friend's messy lifestyle (his house specifically). That is even though I don't like it and I keep my house clean I won't decticate how he should live his life.

Likewise with interest, besides my mortgage, I don't borrow money (well I do put some stuff on Visa but I always pay that) and I have no loans as I don't really like it hanging over my head. However, having said that i would never support the outright ban on collecting interest considering the choice to lend money with conditions and the choice to borrow money with these conditions is a choice made by consenting adults.

At Sunday, November 20, 2005, Blogger qrswave said...


Thanks for visiting! I am genuinely glad that you wrote!

Good for you that you don't rack up debt. It's an awful way to live! You're like a slave when you're saddled with debt!

Too bad your local, state, and federal government has racked up the debt on your behalf! And your taxes pay the interest!

Also, I agree. no one should be forced to stay away from interest if they insist on paying it.

I declare that if anyone feels the need to borrow at interest after the government makes interest-free cash available to anyone who can put it to good use, then I will not object, though I will be sad that they make that awful choice!

Thanks for stopping by. There's plenty of other great reading at my site. I hope that you come again!


At Sunday, November 20, 2005, Anonymous Anonymous said...

I declare that if anyone feels the need to borrow at interest after the government makes interest-free cash available to anyone who can put it to good use, then I will not object, though I will be sad that they make that awful choice!

Interest-free cash = free money; no?

I mean, if there is no penalty for non-payment then why would I do it? Or is there a penalty (e.g. jail?)

I'm just trying to understand what it is you're proposing.

Where is this money come from? taxes? or does the government simply print out more bills?
Who gets it and how much? You say "anyone that can put it to good use", well..thats everyone! And how do you deal with inflation. If everyone has access to this, it lowers the value of a dollar, and if anyone can have as much money as they please it makes money completely worthless.

At Sunday, November 20, 2005, Blogger qrswave said...

Thanks for the comment, Daniel.

My time's up for the day. And, I won't be available again until after the holidays.

Interest free does not mean it's free; if you borrow it, then you must pay it back WITHOUT INTEREST or have a darn good reason for not paying it back. Plus, bankruptcy laws could remain in place, minus the interest.

If it's taken as an equity investment then you must use your best efforts to make it work, just as any co-investor would.

Please, read this; and look at some of the outside links on my sidebar.

If you still have questions, I'll be happy to answer them when I get back from my hiatus.

Have a great holiday!

At Wednesday, November 23, 2005, Anonymous Anonymous said...

The link you sent me doesn't really explain anything, and the link on that page for "equity investing" is broken.

I would recommend you summerize your argument (along with solutions) in one place. I'm having a hard time navigating through a dozen or so of your posts.

In light of that, I do have some questions:
1) You say money has to be paid back under your system. My question is: or else what? Currently a ruined credit rating (if bankruptcy protection) and/or potentially government confiscation of your property are punishments for not paying back a loan. From reading some of your articles, I don't see you suggesting we bar further loans from people who default on them, nor do I see you suggesting we confiscate their property. So.. what punishment would await me if I don't pay it back.

2) I don't know where the money is coming from. It seems to me like you're suggesting that the government simply print more money. The problems arising from that are obvious. So where is the money coming from? Taxes?

3) How much is available for a citizen? Can I borrow a million dollars? Can I borrow $200k for a house? or $100k for a small-business? How often can I borrow? Who decides? Do corporations get to borrow (big) money?

4) Are the interest-free loans aimed primarly at the poor? Or can anyone make a loan?

Happy Thanksgiving (we in Canada had ours a while back)

At Thursday, November 24, 2005, Blogger qrswave said...

Thanks, Daniel, for your comment.

I am sorry that the equity investing link doesn't work. I will try to fix it.

Now, for your questions:

(1) Similar consequences for defaulting on loans can apply under a interest-free economy as apply under an interest-based one; simply, minus the interest. People remain accountable for their financial obligations; unless they are completely unable to pay because they are disabled, in which case the loan should be forgiven. Forgiveness is charity.

(2)I understand your apprehension about printing too much money. but, if you think that the US treasury does not currently print money each year you would be sorely mistaken. Some form of currency, bills or credit, must be increased in the economy each year if it is going to grow. The economy simply cannot grow, otherwise. New currency must simply approximate as close as possible the annual increase in national productivity. Prudence staves off inflation.

Interest accelerates the demand for new currency in order to pay for the interest. The only reason it doesn't translate immediately into horrendous inflation is because most of the new currency IS NOT circulating here in the US.

(3)How much can be borrowed depends on the economic conditions. You borrow what is needed to finance (facilitate) productivity. And, once that is achieved, you pay back the money you borrowed. A fixed fee can be charged for financial analysis of the plan and administrative cost of the loan; this fee must not be a percentage of the loan. It should reflect the labor (productive) costs of loaning (financial analysis is productive, as is the administration of the loan). Ideally, banking should be a non-profit endeavor to ensure that people are not exploited because of their need for capital to finance (facilitate) their productivity.

(4)interest-free loans must be available to anyone who can put it to productive use; though, of course, whether or not a loan for a specific project is approved should depend on the market's need for that project, which is the equivalent of a feasibility study.

Also, keep in mind that with interest-free lending, the interest in equity investing will increase, as it should. So, there will be more opportunities for entrepeuners to find interested equity investors--because that would be the only way that people with capital could make a profit. And, that is a good thing because equity investing is designed to be a win-win endeavor.

Thanks a lot for stopping by and asking questions.

Have a great one!


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