A long time ago, the philosopher Aristotle said, “The worst way to make money is by getting extra money from money itself instead of using it to buy and sell things.” He meant that money should help us get what we need, not just grow into more money all by itself.
Today, the government can make money by printing more. But we have a system where banks get money for free from the government, lend it, and then destroy it when it is repaid. When they lend money, they ask for extra money back. This extra money is called interest. It’s like if you borrowed something that cost very little and had to give a lot more money back when you returned it.
Because of this, many people only care about how much extra money they can make. They call this “return on investment.” This means that the goal is to make money just by lending money, not by making or selling things people need.
Also, rich people often pay less extra money than people who don’t have much money, which isn’t very fair.
Usually, a market is like a big store where everyone can choose what to buy or sell. It works best when there are many choices. However, with money, a few big banks use the same system, so there is little choice.
A straightforward fix is to change how banks lend money. Instead of charging extra money (interest) on loans, banks could charge a standard fee each time you pay some of the loan back, and the rest of the repaid money could be shared with the community, helping everyone.
This way, new money would be used to help everyone get the things they need, not just to make more money for a few.
A Comparison Between Regular Loans and Fair Loans for Housing
The loan compared is $300,000 at 6% over 20 years.
With regular loans of $300,000, the community increases its wealth by $123,716, while with a Fair loan, the community increases its wealth by three times as much to $393,798.
Wealthy Investors who can repay the loan quickly will have an arrangement with the bank, and we are not privy to the arrangements. However, we know that investments end up mainly as increases in capital rather than taxable income and the capital is not recycled as it is with loans to the community of users.
For housing, a house buyer will pay about 35% less to purchase a home and will have an extra investment of 35% from the repayment investments.
