>unpayability of usury/interest?
>Posted by: "Daniel Reeves" dreeves@... pegarmpaul
>Date: Thu Jun 21, 2007 11:56 pm ((PDT))

DR: I'm not taking John's bet below

JCT: Can't come up with a payment schedule to prove the
error of the unpayability of usury/interest?

DR: because it would lead to an endless argument over
definitions of terms like "new money"

JCT: He doesn't like rigorous definitions. So call them
"chips" or "tokens" if "money" or "coins" is too confusing.

DR: but I did want to chime in in hopes of clearing up a
misunderstanding about the payability of interest on a loan.

JCT: He can't come up with a payment schedule for coins to
prove the error of the unpayability of usury/interest but
he's found another way of proving it without any coins?

DR: A thought experiment that has helped me is to pretend
there is no money and just look at movement of wealth.

JCT: Reminds me of another famous thought experiment. An
chemist, engineer, economist were on an island with one can
of food but no can opener. The chemist suggested: "Let's put
bottom of the can in a local hot-spring hoping the chemicals
might weaken the metal and they could get at the food." "Too
long," said the engineer. "Let's use our glasses to focus
the sun's rays onto the can and the expansion of the
contents will break open the can and we can get at the
food." "Too long," said the economist. "Assume a can
opener."
So Daniel can't provide a simple 3- or 2-payment schedule to
show how a person alone on his island can pay off all the
coins owed, the principle and interest on his debt, but
wants us to assume a solution.

DR: Remember the distinction: wealth is the actual stuff we
want, money is just a way to transfer it.

JCT: A truck is a way to transfer it. Money doesn't transfer
stuff. It facilitates getting the truck but doesn't transfer
it. So, avoiding a simple spreadsheet because he doesn't
want to be pinned down on definitions, Daniel now starts off
with a description of what money helps do, not what it is.
He wants to define the thing as its function.

DR: So the question "how can I repay a loan with interest;
where does the extra money come from?"

JCT: First you have to settle who gets to issue the tokens.
Oh right, to Daniel, money isn't a token, it's a way to do
something, an algorithm.

DR: becomes "how can someone give back more wealth than they
were loaned; where does the extra wealth come from?"

JCT: It's the difference between interest on cows and usury
on gold. Cows have babies, gold does not. To ask where the
extra cow comes from sounds far more stupid than where the
extra gold comes from? The whole issue is debt in a medium
which is kept in short supply. Presume enough, says Daniel.

DR: Well that's easy to answer.

JCT: The easy answer to the problem that can't be explained
using coins?

DR: The same place all wealth comes from: people make it.

JCT: If people make money, they go to jail.

DR: They build things, do work, cough up property.

JCT: That's how they get some but how they make it. Money is
not made by working. Alone on my island, how does building
things come up with the eleventh dollar in interest I owe to
add to the 10 in principle I got.

DR: Say you have a beautiful painting (= wealth) that I want
and I have nothing to offer you for it except the promise to
return it to you later. That's a big favor I'm asking you.
To keep things fair, I might offer you a small thing of my
own in return (say, doing your dishes). So there you have
it, I borrowed the painting and paid it back, plus interest
(doing your dishes). Everyone's happy. It really is,
fundamentally, as simple as that.

JCT: Presuming you can pay off both the principle and the
interest when you only got the principle is, fundamentally,
as simple as that. Har har har har. And yet it's so simple,
he can't actually build a simple payment schedule using
actual coins. He's got to transpose into his wealth analogy
because he can't do with real money.

DR: And, by the way, there's nothing magical or
mathematically insidious about compound interest either.

JCT: Sure there is. It's got Daniel convinced he can pay 11
when they only printed 10. He only had to presume it could
be done and within that context, it can be. Har har har.

DR: In fact, the concept is already implicit in this "extra
favor" conception of interest. Say our agreement is that
while I have possession of your painting I'll do your dishes
once a week. That's the agreement but now I ask you the
favor of letting me postpone my dishwashing this week and in
exchange I'll carve you a little wooden duck (or something).
Work that out with numbers and you have compound interest.
Note that interest only compounds if you shirk the payments.

JCT: So show me how I can repay the 10 coins you lent me and
your simple 11 coin in interest! Har har har har. Isn't it
funny that Ryan/Kline/Hogbreath argues that it's the
compound payments that can be juggled so the interest can be
paid because the impossibility is obvious with simple
interest though he could never provide a payment schedule to
prove I could repay 11 coins when he only lent me 10, and
now we have Daniel telling us that it's the compounding
that's the problem so he didn't even see the impossibility
staring him in the face that Ryan was trying to use
compounding to avoid. Har har har har.

DR: Compound interest is just simple interest applied
recursively to the missed payments which can be treated as
additional loans.

JCT: And he can't prove his point whether it's with compound
usury or simple usury. Har har har har. Daniel presumes to
challenge me on banking systems engineering is like Gilligan
presuming to challenge the Professor, a battle of
engineering wits with an unarmed man.


> JCT: The pseudo-socred lunatic who changes the subject..
> If you're alone on your island, your mortgage
> has no possible pay-off schedule.
> You said a $1000 loan amortized at 10% could be paid off
> if we're the only two on the island. I bet US$100 you
> can't provide a simple quarterly payment schedule without
> recourse to outside money.

JCT: The bet Daniel and the whole crew of nay-sayers can't
take. 1000 coins at 10% in any payment schedule they want.
Put your money where your mouth is, if you can't put up,
it's better to shut up and and seem ignorant of B.S.E.
rather than speak up and remove all doubt.


--
Abolitionist Debt Slave Leader John C."The Banking Systems Engineer"
Turmel for UNILETS interest-free time-based currency in U.N. resolution
C6 to Governments in the http://www.un.org/millennium/declaration.htm
http://www.cyberclass.net/turmel USENET blog: alt.fan.john-turmel