It's the Interest, Stupid! Why Bankers Rule the World

It's the Interest, Stupid! Why Bankers Rule the World

Interest charges are a strongly regressive tax that the poor pay
to the rich. A public banking system could realize savings up to 40
percent - allowing taxes to be cut, services increased and market
stability created - with banks feeding the economy rather than feeding
off it.

In the 2012 edition of Occupy Money released
last week, Professor Margrit Kennedy writes that a stunning 35 percent
to 40 percent of everything we buy goes to interest. This interest goes
to bankers, financiers, and bondholders, who take a 35 percent to 40
percent cut of our GDP. That helps explain how wealth is systematically
transferred from Main Street to Wall Street. The rich get progressively
richer at the expense of the poor, not just because of "Wall Street
greed," but because of the inexorable mathematics of our private banking
system.

This hidden tribute to the banks will come as a surprise to most
people, who think that if they pay their credit card bills on time and
don't take out loans, they aren't paying interest. This, says Dr.
Kennedy, is not true.

Tradesmen, suppliers, wholesalers and retailers all along the chain
of production rely on credit to pay their bills. They must pay for labor
and materials before they have a product to sell, and before the
end-buyer pays for the product 90 days later. Each supplier in the chain
adds interest to its production costs, which are passed on to the
ultimate consumer. Dr. Kennedy cites interest charges ranging from 12
percent for garbage collection, to 38 percent for drinking water, to 77
percent for rent in public housing in her native Germany.