Forum Post: Infinite Debt: The Legalized Crime of Usury

How urgently is this message needed in a world where the "debt crisis" threatens to destroy and annihilate our civilization, were open warfare is increasingly the consequence of the anxiety and suffering that spring from third world debt. Politicians have seldom looked at money-lending at interest as the cause of widespread poverty in the midst of plenty, because whilst this practice was once forbidden by Judaism, Christianity and Islam alike, it has become universally accepted in the modern world of secularism.

It has been argued that money is a "producer good" and that the lender should receive a share of the extra wealth that these goods produce. Yet this is illogical on several points.

The only true producer of wealth (i.e. goods and services) is Labor when it is applied to either Land or Capital. Unlike Land, Money is infinite when not artificially restricted, which it often is. Money is man-made out of nothing and at tiny real cost. This credit creation confers enormous economic power and influence on those usually private institutions who have secured for themselves monopoly rights in this money issue.

That private banks create money out of nothing is a fact too little known amongst the public.

Have you ever asked yourself who is that fabulous lender who always seems to have all the money which the government does not have? Whom does the nation owe the national debt? The truth is that when banks create money (as check-money or blips on computer screens) they lend what they have not got to reap where they did not sow.

Their loans are not backed by any real wealth on their behalf. Nor do they lend out depositors' money (or when did the bank last tell you that you can't take out money from your account, because it has been lent to someone else?). When you give your house or business as guarantee for their money, this money is not backed by gold, silver or tangible wealth. It is an empty promise except for the fact that the government, with the central bank as lender of the last resort, is ready to bail out the banks should a run on their money occur.

Bank-created credit is based on the nation's capacity to produce and consume in the sense that whilst it is not issued nor backed by the government, the government - being the largest debtor - guarantees a certain return in debt service payments from its revenue. An increasing part of local and national government taxation today is raised for the purpose of servicing the interest payments on local and national government debt.

So whether you personally borrow or not, you pay the interest on that fictitious money. Likewise, when you take a bank loan, you pay at least twice: you give a guarantee of real wealth in case of default, and you pay a penalty (as interest) for accepting money as a loan which costs the lender nothing and did not exist until it was created as a loan to you. Heads you lose, tails you lose again...

As should be evident by now, to base an economy on interest is a pretty stupid way of servicing a nation's need to produce, consume and trade. It results in the evils of inflation, unemployment, decline of services, trading war, and finally, shooting-wars. Using interest rates as a means to control the problems of a nation's economy is futile, as these problems were created by interest in the first place.

Only when a government creates its own money supply free of charge to the nation to facilitate production, consumption and trade, instead of authorizing private banks to create the nation's money and then holding the nation at ransom by breaking its back under the ensuing interest debt, only when we get back to a system where the usurer is not being rewarded for taking advantage of others' difficulties, will we achieve real prosperity.

http://www.islamic-awareness.org/History/usury.html