I hate paying interest. Think of what paying interest means. First, it means you have spent money that you did not have. Second, it means that you borrowed someone else’s money to spend. Third, it means that you are now obligated to repay the lender not only the money that you borrowed from him, but also to pay him a fee for the loan. And it often means you have pledged something of value as collateral of the loan. Debt is sometimes necessary. But when it is, it is a necessary evil and should be extinguished as soon as possible. Debt when it is unnecessary is destructive. Debt disguised as “investment” or “leverage” is particularly so.
The three great monotheistic religions of the world–Judaism, Christianity and Islam–all forbid the charging of interest on loans. Practioners of those faiths have tried to find ways to wiggle around the prohibition. Judaism allowed the charging of interest to non-Jews. The Christian world eventually chose to pretend that the prohibition doesn’t exist, so as not to impede the growth of capitalism–our new god. Taken more seriously in the Islamic world, the prohibition is still often cleverly ignored and circumvented. Can we conclude, however, that God doesn’t like interest either?
We are a culture addicted to debt and the payment of interest. Not long ago in our country, being in debt was considered disgraceful. Now it is a fact of life, promoted and incented by business and even our government.
Our national debt is now $11.3 trillion. That is a shocking $2 trillion greater than just one year ago. Additionally we are obligated to pay between $60 and $100 trillion in future unfunded liabilities (mainly Social Security and Medicare). Of course that is a debt that is impossible to repay.
Eventually our country will collapse under the weight of this debt. That meltdown will make our current economic problems seem trivial by comparison.
In the meantime we suck production out of our country to pay interest on the national debt. The amount of interest we pay (largely to foreign central banks) is astonishing. In December 2008 we paid almost $98 billion in interest. In April 2009 we paid nearly $25 billion in interest. In FYE 2008 our government paid over $450 billion in interest, and we are going to shatter than record this year.
This is criminal. Imagine for a moment all the good that could be done if that money stayed in the pockets of the Americans who earned it, instead of being sent to our foreign creditors. If forced to spend hundreds of billions of dollars, think of all the great things we could spend it on, rather than pay it in interest.
If you have a calculator that will allow you to do this, take the amount of income tax you paid last year and divide it into 451 billion. The result is the number of Americans like you whose income tax payments were devoted entirely to payment of interest on the national debt.
Here are the details regarding interest payments on the federal debt: http://www.treasurydirect.gov/govt/reports/ir/ir_expense.htm
As Mr. Jefferson wrote:
If we can prevent the government from wasting the labor of the people under the pretense of caring for them, they must become happy.