Re: TURMEL: Ben Franklin, Prof. Flaherty, on Death gamble

From: Castlef (joejmd_at_yahoo.com)
Date: 11/18/04 

Date: 17 Nov 2004 19:27:16 -0800

william_b_ryan@hotmail.com (Bill Ryan) wrote in message news:<45bb7944.0411170809.6aeca7e2@posting.google.com>...
> The bank creates a dollar, and a million dollars in
> the breadth of the same stroke. The bank profits on a
> small loan, as well as a large. But the service they
> provide is the same between a small loan and a large.
> It is just as easy for them to create $100,000 as
> $1,000.
> -----------------------
> ---------------------
> [REPLY] This is the "debt virus" crank's argument in
> a nutshell. You couldn't have said it better, the
> ignoramus that you are. It reflects a profound lack
> of understanding of the nature of banking as it has
> evolved over the centuries into what it is today.
>
> First, the crank's argument ignores the risk of
> default, which is a linear function of principal
> outstanding. So, a portion of interest payments on
> outstanding principal are a risk premium, where those
> who are servicing their debt are actuarially
> compensating the lender for those who are defaulting
> on their debt.
>
> In this respect banking is a variation on the concept
> of insurance: the pooling of assets and the sharing
> of risk.
>
> The banker is effectively endorsing the credit note
> of the borrower, by exchanging his notes (or deposit
> liabilities) for that of the borrower, and is
> personally on the hook to the community for the
> principal outstanding--whether $1,000 or $100,000.
>
> As with any business in regard to the costs of doing
> business, the banker's losses from defaults are
> passed on to his customers, the borrowers, in the
> form of increased interest charges.
>
> Simple arithmetic tells us that 100 is 100 times 1.
> Even a "profit sharing" or "non-profit" bank would
> have to charge at the very least a hundred times the
> "service charge" in risk premium on principal of $100
> thousand than it would on $1 thousand.
> ->
>

It is a pitiable argument, to argue that "charging at the very least a
hundred times the "service charge""(interest) is justified because of
the risk, when interest itself exacerbates the risk. However I guessed
from the ineptitude which you have displayed in the previous threads
that this would be your argument. And next I am guessing that you will
try to tell people that paying $193,256 on a 5% 30 year $100,000 loan
is justified because of the risk and that the extra $93,256 they pay
in interest does not also somehow increase the risk.

Think about it..... In an interest free system you are Loaned $100,000
to buy a house. With that money you pay the people to build the house
and once its finished you no longer have the 100,000 but you have the
house. This house is your asset to the bank for the loan and now you
work and work and sweat to pay back this 100,000. Now ask yourself
what risk it is to the bank if they have the asset of your house as
their collateral which is worth the same as the loan?

> If the government spent and lent our currency
> interest free, the bookkeeper would not lose his job.
> Only the man behind the bookkeeper; who produces
> nothing because nothing is produced; who services no-
> one because the bookkeeper is he who serviced, will
> be cast aside and with him the bonds of our own
> servitude.
> -----------------------
> ---------------------
> [REPLY] I find it interesting that you do not
> associate the term "servitude" with your
> recommendation that the power of banking be
> amalgamated to the power of government. By
> "government" I suppose you mean some clique claiming
> to speak for the "people." That clique may or may
> not be "elected."
>
> Whatever else it may be--it certainly is not
> consistent with the United States Constitution and
> its appended Bill of Rights, which contemplate
> division of powers and checks and balances on
> concentrations of power, public and private.

Article 1, Section 8, Clause 5 of the Constitution, which provides
that Congress shall have the power "To coin Money, regulate the Value
thereof, and of foreign Coin, and fix the Standard of Weights and
Measures;"

During the Civil War, the United states printed "Greenbacks". Not only
does the government have the power to create money but it has done so
before.

 
> As to "spending" new money into circulation, this
> recommendation eliminates the need to tax or borrow
> the money to spend, which limits the power to spend
> and the power it conveys.

If anyone has been reading this then they would know that earlier in
this thread I stated: " That the government should spend whatever
money they need into circulation, interest free, and tax it back out.
In this way the money that is clearly spent by the government will
clearly be taxed from the people as it should. " . Bill Ryan responded
to that thread and has been with us since the beginning of this
discussion. Once again, more evidence that he is not listening.

>
> How are your recommendations NOT tantamount to pure
> FASCISM?
> -

Please stop with the name calling, and propoganda.

>From senate document 87-240:

69. If the Government can issue bonds, why can't it issue money and
save the interest?
A few clear-headed and firm individuals, such as Abraham Lincoln, have
insisted that the Government should.

The late Thomas A. Edison stated the matter this way: If our Nation
can issue a dollar bond it can issue a dollar bill. The element that
makes the bond good makes the bill good also * * * .
It is absurd to say that our country can issue $30 million in bonds
and not $30 million in currency. Both are promises to pay: but one
promise fattens the usurer and the other helps the people.

http://dewoody.net/money/

NoTiG

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