Nibblet99 wrote:Welcome to capitalism.... Want to try communism instead? A system whereby good work is unrewarded, meaning that every worker turns lazy and does the minimum possible. Creating an unrewarding lifestyle for everyone where not much works (by the way that includes food stuff production, not just luxuries live electricity)
Democracy based Capitalism is far from perfect, but its the best we have at the moment
Capatilism?
You think the West practices capatilism? Capatilism is when investors pool their capital to risk in profit making investments. One pays someone else a fee, interest, to use their money. We have a system that creates previously nonexistant money threw the act of borrowing. Pure fiat monetary inflation creating money out of ones debt.
Think about what you and a bank do to make a profit and how much that profit is.
You can risk your money in a business and more often than not fail and go broke. Or risk it in the bond market for about 5% per year average. After taxes on profits your real return is about three and a half percent. With inflation running three and a half to seven percent a year you actually lose money. That is why government bonds are know as 'certificates of confiscation. Stock market returns average 6-7% over time. Again subtract fees, taxes on gains, and inflation to understand why the masses will never get rich in the stock market.
Now banks take your savings, in the old days that would be gold or money, and paid you a small percentage not to store it but to lend it out. Your $100 got you 3% in a federally insured passbook savings account guaranteed to never lose your money. Again subtract 1% for taxes and 3 1/5 - 7% to inflation and you still lost purchasing power on your nominally increasing savings account. But the bank, through the Mandrake System of fractional reserve banking, is allowed to lend an amount of money, THAT DOES NOT EXIST UNTIL IT IS BORROWED INTO EXISTENCE, 9 times the value of its reserves, which is your money that is sitting in there bank. Now the bank, actually the person signing a loan form, creates $900 of credit that is loaned at 7-21% depending if the money goes to a mortgage or credit card debt. So let us take the average % charged on loans by the banks - 14%, and multiply that by the $900 they created and lent against your original $100 deposit. $900 x 14% = $126. In 1 year the bank makes $126 off of your money and pays you $3, of which Uncle Sam takes 28-30 percent income tax leaving you 2 dollars and 10 cents.
But wait, there's more. The inflation that ate away at your purchasing power allowing you to only buy $95 worth of last years goods at this years higher price of $102 and 10 cents, it came from the $900 created from your deposit. Money that did not exist before your deposit is now chasing the same goods and services that your money is. Any increase in an economies money supply that does not increase the production of goods and services manifest in that economy as price increases. The increase in prices is not greedy businessmen arbitrarily increasing prices because they are evil. They are passing along price increases to them that they are suffering the same as you.
The bank has screwed you twice. It paid you 3 lousy dollars on your 100 dollar savings and it created the inflation that decreased the purchasing power of your money with your own money.
Chew on that for a while then we can consider what happens to our $1000 economy (your $100 + $900 of loans) that is required to return $126 to the bank the 1st year in interest alone, PLUS, $143.64 the second year (exponential interest growth, interest on interest), PLUS, $163.75 the 3rd year, PLUS, $186.68 the 4th year, PLUS, $212.82 the 5th year, PLUS, $242.61 .... in 5 years the banks interest take from a real economy of $100 (your savings) plus the added $900 of money that did not exist before it was loaned, is $1075.50. AND that does not include the original $900 in principal that the borrowers borrowed, the banks term, but really created as loans! In 5 years the banks take on YOUR $100 savings is $1975.50! And the bank paid you for the privilege of using your money to make this profit? $100 at 3% compounded annually is 115.93. And don't forget to pay your taxes on your massive $15.93 cent gains, and remeber your inflation loses over 5 years.