Problem

Payment of interest

Other Names:
Inflation-based monetary systems
Nature:

The crisis in financial systems and the financial difficulties experienced by many arise from the payment of interest from those who have less money to those who have more money than they need. Based on interest and compound interest, a given amount of money doubles in value at regular intervals, following an exponential growth pattern. The continual payment of interest and compound interest is arithmetically, as well as practically, impossible in the longer-term. The concentration of money in the hands of fewer people or enterprises creates a constant pressure for large scale investments. Military production is perhaps the only area through which the saturation point can be postponed indefinitely.

Incidence:

One of the symptoms of this system is inflation which is effectively another form of taxation through which governments try to overcome the worst effects of increasing debt, resulting from the monetary system they created. Inflation, through the printing of money, is a way for government to overcome its increasing interest-related indebtedness. For example, government income in the former West Germany rose only 300% between 1968 and 1982, whilst its interest payments rose by 1,160%. Such problems would be avoided under an alternative system in which people would pay a fee if they kept money out of circulation.

 

Claim:

Interest in effect acts like a cancer in the social structure.

 

Narrower Problems:
High interest rates
Problem Type:
F: Fuzzy exceptional problems
Subject(s):
CurrencyMoneySystemsEconomics
Date of last update
21.12.2017 – 18:23 CET