The only way to eliminate the problems caused with paying interest is for people to stop trying to collect it for themselves. For example, student debts are related to teacher pensions. To think otherwise is to be in denial. Everything is connected.
We often hear the term 'enlightened self-interest' bandied about as the delicate balance required for a free society. The greater part of this wisdom is self-restraint. Unearned income is a huge and destructive temptation. What goes around must come around, and we have all been indoctrinated by tradition to accept what should be unacceptable. If it is possible to make money without labor, then someone must be laboring without getting paid. All interest is usury. Any amount more than zero slowly cascades and drags society into a slave system of growing misery. Fascism advances, commonwealth recedes.
Eliminating interest will not solve all the mathematical problems in society, which is why further reforms are needed. However, it is the easiest place to start since only a surplus can be lent or invested. There is nothing wrong with saving or planning for the future. The problem is in trying to manipulate money. It creates the very problem hoping to be avoided: inflation and volatility. We cannot escape the consequences of our own actions, for better and ill.
If the middle-class were to forgo trying to collect interest via CD's, 401K's, mutual funds, and annuities, then it would be a dramatic change in philosophy and behavior. It is not that hard to do. Pick up the phone and sell. Transfer the funds to your local bank. Even if you pay a government penalty for early withdrawal, it is no big deal. Pay taxes this year instead of later on. Never care again about what the stock market is doing.
The middle-class, particularly the worker unions, have the power to free themselves of their bondage to a lie. They can use the money to pay their own debts or the debts of their children. To be debt-free, and innocent of predation, is the wisdom behind the Poor Richard's Almanac entry: 'Neither a borrower nor a lender be."
While this idea may seem radical and unworkable, in fact, what we are doing now is already radical and unworkable. Social Security was created because of the collapse of Wall Street. Now, people are trying to supplant their Social Security by investing in Wall Street. This is partially why programs like Social Security are inadequate, and why pensions become unworkable. We have made the original disease into a cure!
It is ridiculous for people to spend their working years full of fear about retiring. A more stable and logical system is possible, as will become apparent. People growing old is not a new phenomenon. Just as we can plan better for the youth, we can plan better for the elderly. Because of computers, we have programmed a highly sophisticated habit of hoarding and investing. Every percentage that can be found or created is squeezed. Numbers are the new alchemy, and the wizards are full of self-delusion. Accounting is a simple thing, but it has become unnecessarily difficult trying to force 2+2=5. It will never be true.
A domestic divestment movement from Wall Street is the single best and easiest thing the middle-class can do for themselves. This is not a 'run on the banks.' It simply shifts funds from Wall Street to Main Street. What people have today they will have tomorrow, but the stampede of the rat race will begin to turn.
Insanity is doing the same thing over and over and expecting different results. Either expectations need to change, or behaviors. We cannot act like misers personally and expect to enjoy the public liberty of a strong commonwealth. The only way that 'We The People' can lead the government and business community is by setting an example. The middle-class can make the manipulated money markets dry up by refusing to participate. By lowering the cost of living, we can raise the standard of living and quality of life.
There are two faces to the scourge of inflation. One is the price of the goods going up, the other is the value of the money going down. Inflation will always outpace interest. Higher yields lead to even higher inflation. Compounding interest devalues the currency. While the numbers seem bigger, the purchasing power of what was accrued is diminished. Of course, what we should not be doing as individuals, larger institutions should not be doing either.
The poor and young, as they manage to rise up the economic ladder, quickly fall into the bad habits of the middle-class. The rich, of course, have luck on their side (not skill). But, even when they become philanthropists, they seldom question the process that brought them to the top. It is not how much money you have that is important, but how you handle it. Money should always be a tool, and never a weapon. Taking interest is to exploit the poor and young. Prophets have long warned about profit (interest is profit on money) with good reason. Forgoing interest is the easiest step to take. Abolishing profit is a bit more complicated, but equally necessary.
Reforms for Local Government
Taxes have always been a hot point of dispute and with good reason in modern times. We have three levels of government (local, state and national) and three forms of taxation (income, sales, and property). We are taxed for earning money, for spending money, and for owning what was purchased.
You are taxed for owning a home, renting a room, eating food at a restaurant, traveling on a road and for buying a car, owning a car and when fueling the car. You are also taxed for parking the car or crossing some bridges. You may be taxed for buying clothes, or fined and imprisoned for removing them. So, where do we start in fixing such a ridiculous mess? We start at the bottom, of course.
Of the three forms of taxes, property tax is by far the worst. You are taxed for what you own. You do not own your home, you live in it under license from the local authority. If you miss some tax payments, then they have the right to seize the home. The punishment is grotesquely disproportionate, and captures the most fundamental problem in our society, how we manage land and property. To reform local government, we must reconsider not only issues of cash flow but the concepts of ownership and stewardship, too. This is an old challenge. Even the Magna Carta dealt with issues regarding abuse of the environment. Clear-cutting, pollution and over-harvesting natural resources to the point of extinction are one of the glaring problems of a profit-motivated system. The interest and profit associated with real estate drives much of our economic madness. It can be eliminated with local control and a shift in tax policy.
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