Let us Stop Renting Money

Kevin Cox
3 min readNov 5, 2023

The word “usury” comes from the Latin word “usura,” which means “payment for the use of money, interest,” literally “a usage, use, enjoyment,” from “usus,” from the stem of “uti” (to use) — Online entomology dictionary.

Why does the government borrow money?

When governments have insufficient tax revenue to fund their programs, they borrow money by selling bonds to other nations or private industry. This is unnecessary because governments can create money at no cost, so why do they borrow?

They borrow because it gives rich people an economic advantage as they already possess money and can borrow more new money. The rich then lend the money to other people who create the profits that pay off the loan or use the loan to buy assets that others have already created to pay off the loan. The hard part is making the profits to pay off the loan — not providing the loan.

Giving rich people an economic advantage stunts economic growth and reduces productivity growth.

It stunts economic growth because it requires people without money to borrow it, which costs them extra. The result is a reduction in economic activity because excess money moves to rich people, and they accumulate it rather than invest it in new production as they can lend it to acquire existing profitable assets and get a return without effort.

We need people to save money to invest in producing new goods and services. Instead, we have a system for rich people to lend to others and receive a return without producing anything extra. The result is the lending of money for non-investment purposes, slowing economic activity and a drop in productivity.

We can see the effects of dysfunctional housing markets. Making these changes outlined in this article could result in affordable housing for everyone.

Government outsourcing money creation

The problem has been exacerbated by the government’s decision to outsource it to shareholder banks. Banks create new money by lending it out to borrowers with no effort. Although there is a risk of non-repayment, it’s relatively low since banks typically lend to borrowers with collateral, which they can seize if the loan isn’t repaid.

The borrower puts in all the effort to generate profit and pay back the loan and the interest. Once the bank receives the borrowed amount, it circulates back into the community. However, the bank keeps all the interest generated despite not being a part of the initial loan, and the borrower bears all the costs of creating a profit to pay the interest. It would only be fair if the bank shared the unearned profit with the borrower.

Sharing the interest payment by reducing the amount owed allows for profit sharing without an immediate profit reduction. It also increases the rate of money circulation, allowing for further investment for no extra money.

Invest Existing Money Rather than Bank Loans

If we choose to invest existing funds instead of relying on bank loans, we can eliminate the cost associated with borrowing money. Instead of paying interest, the borrower can offer a portion of the profits as compensation. However, sharing the profits means reducing the overall profit, but sharing future profits doesn’t affect immediate profits.

One way to offer a share of future profits is to have each payment cover the cost of the goods and services, the profit, and purchase shares in the company. If the shares are obtained from an existing shareholder who must sell some share each payment period, it eliminates the need and cost of establishing and operating a market in shares. In this way, the profit acts as new capital, while the buyer of goods and services obtains equity in the company as well as the goods.

Investing in capital markets can be costly and uncertain. Accumulating capital as an increase in share prices often creates unrealised gains and stagnant capital. Removing uncertainty and reinvesting capital gains immediately, increases capital productivity. Although these costs may seem small on an individual sale, they accumulate and compound over time.

By utilizing community capital, groups of buyers and sellers can collaborate to eliminate the expenses associated with renting money and capital markets. This approach also maximizes the use of existing funds for investment purposes, typically resulting in a doubling of investment from a given amount of capital.

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Kevin Cox

Kevin works on empowering individuals within local communities to rid the economy of unearned income.