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thjere would be no economic crisis if usuary was banned

LGT

Junior Member
Oct 11, 2008
12
0
0
if the charging of interest was banned... there would be no incentive for banks to lend money
so
banks would get their money from other services such as transfers and checking account fees
and people would buy their houses without mortgage.. instead of $500k houses maybe they would be $50k for example...

Because.. borrowing is not necessary for a good economy... if 1 person borrows money it makes other people or countries have to borrow money to keep up...just inflating prices of everything and giving bankers a fat check

also there would be no economic crisis right now

discuss
 

ebaycj

Diamond Member
Mar 9, 2002
5,418
0
0
So wrong it's not even funny. This is exactly why we should (and for the most part, do) have our lawbooks de-coupled from religious teachings.
 

StageLeft

No Lifer
Sep 29, 2000
70,150
2
0
So wrong it's not even funny. This is exactly why we should (and for the most part, do) have our lawbooks de-coupled from religious teachings.
I'd like to go further. Let's go back to only land owners being able to vote. It's kind of a vote of confidence in their ability to at least not suck 100% at life.
 

LegendKiller

Lifer
Mar 5, 2001
18,256
68
86
1. Your premise doesn't even work, the problem has nothing to do with interest, it's one of getting ito debts you cannot pay, regardless of interest.

2. Arabs kinda charge something similar to interest. They are just very inventive about it so that it's not called interest but technically is.

There's a whole market in securitization for this. It makes western lawyers and bankers *very* rich.

Research how arab mortgages work and how those are securitized, very interest read. The lawyer who came up with the structure is a very rich man.
 

JJChicken

Diamond Member
Apr 9, 2007
6,166
12
81
Originally posted by: LGT
if the charging of interest was banned... there would be no incentive for banks to lend money
so
banks would get their money from other services such as transfers and checking account fees
and people would buy their houses without mortgage.. instead of $500k houses maybe they would be $50k for example...

Because.. borrowing is not necessary for a good economy... if 1 person borrows money it makes other people or countries have to borrow money to keep up...just inflating prices of everything and giving bankers a fat check

also there would be no economic crisis right now

discuss
Definately some good points here
 

StageLeft

No Lifer
Sep 29, 2000
70,150
2
0
Let's pretend that 450 of the 500k for a house is lending and bank overhead and in 50k is enough for the labor, parts, and land. Am I supposed to save up 50k first? How? Without a student loan I'd probably be making chump change. So do I save up my education first, then get a degree, then save 50k? The whole premise here is a major fail.
 

ch33kym0use

Senior member
Jul 17, 2005
495
0
0
I'd encourage more saving and investment. The problem is obviously too much borrowing and spending, so, of course, it is simple for me to not follow the sheeple with the bad borrowing and spending habits of other people by saving and investing more in the rights places. Simple. lol
 

Thump553

Lifer
Jun 2, 2000
11,927
1,259
126
You do realize that interest rates in the last couple of years have been about as low as they ever have been since the fifties?

Interest is the cost of capital and is a necessary function of a modern society. Admittedly some religions ban it for reasons really more relevant to social conditions when the religion originated. Very similar to the Jewish and Islamic prohibitions against pork and shellfish, which made a lot of sense before fast transportation and refrigeration. Now they are basically quaint customs.
 

Mark R

Diamond Member
Oct 9, 1999
8,513
13
81
Originally posted by: LGT
if the charging of interest was banned... there would be no incentive for banks to lend money
so
banks would get their money from other services such as transfers and checking account fees
and people would buy their houses without mortgage.. instead of $500k houses maybe they would be $50k for example...
The islamic and Middle Eastern banks have mortgages. They work exactly the same as any other mortgage - it's just that the interest isn't called interest, it's called rent.

Go to any islamic bank, and you'll find savings accounts which will pay you for depositing money in the account (it's called a share of profit from business dealings, rather than interest), but you'd be pushed to tell the difference between that account any any other savings account.

Want money for a business venture? You can get a 'loan' on which you pay 'interest', except it isn't called a loan, it's called 'capital assistance', or something similar, and it's not called interest, but something like 'share of any business proceeds'.

Borrowing of money is not a bad thing, in and of itself, it allows opportunities to be followed more easiliy and effectively, and makes the whole economy more efficient.

The problem we have today is not that money was lent, nor that it was lent at usurious rates. Rather, it is that excessive money was lent, and it was lent inappropriately, and it was wasted or invested badly rather than used for economic growth.
 

StageLeft

No Lifer
Sep 29, 2000
70,150
2
0
Now we know that the author of this read a link elsewhere. I think on drudge or money.cnn.com or other today I saw some islamic cleric saying it's an opportunity for the world to adopt islamic financial approaches.

Yes, that's a great idea. The middle east is POOR AS FVCK. Even those countries awash with oil money are crap. The only ones that aren't have taken their money and adopted Western financial approaches anyway.
 

Kadarin

Lifer
Nov 23, 2001
44,302
9
81
OP is correct, which is why the Islamic world far outpaces the West in terms of being the economic powerhouse on the planet.
 

MovingTarget

Diamond Member
Jun 22, 2003
8,992
96
91
Depends on how you define "usury". Sure, some profit is okay, but not to the point where it is harmful to your customers or to society at large. Look at credit cards or payday loan places as examples. We once had usury laws to limit the amount of interest that could be charged on balances, but iirc, these have been largely relaxed or even eliminated. Usury, to me, amounts to loan sharking. In that case, you are correct in that we need to reinstate them as reasonable consumer protection. However, I disagree with your conclusion that it would've prevented this economic situation.
 

Vic

Elite Member
Jun 12, 2001
48,474
9,423
126
Yeah, because making it so those with money have no incentive whatsoever to lend it back into the economy is a great idea. :roll:
 

piasabird

Lifer
Feb 6, 2002
17,168
60
91
So lets look at this no interest thing for a while. If you did not have credit available, how do you buy a house or a car and what happens when you do not pay. Do you go to jail if you dont pay your debt or under islamic law do they just cut your head off?

Money has value. You have to pay something for using someone elses money. Then some people are more of a risk to lend money to than others.

Jesus taught a parable about usary and the parable said someone had to pay the debt.
 

RocksteadyDotNet

Diamond Member
Jul 29, 2008
3,152
1
0
He's right, there would be no economic crysis. But that's because you would have no economy to have a crysis in. Your GDP would be about $3.50.
 

WHAMPOM

Diamond Member
Feb 28, 2006
7,628
181
106
Originally posted by: LGT
if the charging of interest was banned... there would be no incentive for banks to lend money
so
banks would get their money from other services such as transfers and checking account fees
and people would buy their houses without mortgage.. instead of $500k houses maybe they would be $50k for example...

Because.. borrowing is not necessary for a good economy... if 1 person borrows money it makes other people or countries have to borrow money to keep up...just inflating prices of everything and giving bankers a fat check

also there would be no economic crisis right now

discuss
If by usuary you mean Payday Loans, Title Advances and credit card charges, "OH!" and telephone add on charges and advancing due dates for payments so you get hit with late charges. Is it just morally corrupt capitalism run amok and turned into an anything goes system operating solely for the sake of profit?
 

Harvey

Administrator<br>Elite Member
Administrator
Oct 9, 1999
35,052
28
86
Originally posted by: LGT

if the charging of interest was banned... there would be no incentive for banks to lend money
so banks would get their money from other services such as transfers and checking account fees and people would buy their houses without mortgage.. instead of $500k houses maybe they would be $50k for example...
discuss
Your analysis is as shallow as on oil slick on the pavement. Go back to school, and study economics. There is an intrinsic value to money, and there are any number of reasons why someone would want to lend it to someone else. For example, one incentive would be to invest in someone else's business and to receive a reward from to share in the profits.

Interest is not inherently evil, and the current financial crisis is NOT a result of interest. It's the result of deregulation and lack of oversight of those who had the ability to manipulate and inflate the financial system to their unfair advantage. Other systems would be just as open to abuse and fraud within their own structures and proceedures.
 

Stuxnet

Diamond Member
Jun 16, 2005
8,403
1
0
Originally posted by: necine
Completely wrong... borrowing has always existed, and will always exist.
Exactly... it's just that sometimes people borrow camels.
 

OverVolt

Lifer
Aug 31, 2002
14,278
87
86
Yes, interest is what will cause the economy to collapse.

The only way the economy keeps going is with the infusion of loans. No loans, no economy. Of course those loans are due, with interest. How do you pay back a loan of principle + interest, when the only money in the economy is whatever principle the debtor borrowed? The money doesn't exist. So.. The banks must make more and more loans. The only thing keeping the economy from collapse is the delay between when loans are made, and when they are due with interest.

A slowdown in loans means less people will be able to pay back their principle + interest (housing foreclosure). The money simply doesn't exist. It's not the debtors fault, it's not the banks fault, it's an inherent flaw in our economy IMO. If the banks stopped lending money, no one would be able to pay back their loans. Without anyone paying back their loans, the banks can't lend money. Hopefully we can avoid a death spiral *this* time but, meh. It's inevitable.

There's just going to be a saturation point where you get diminishing returns on trying to make more and more loans. Been there done that.
 

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