[This is Meganology from Shakesville, btw...just commenting anonymously because I have neither a Dreamwidth account nor and OpenID]
Excellent points all around, and I have a couple more that I've been stewing on.
First: resetting everyone's debt to zero would probably be the best conceivable economic stimulus package right now. If people are forking over huge portions of their income to lenders, that's money they're not spending on shoes or bicycles or washing machines or paint. Ultimately, massive debt burdens are taking money out of effective circulation in the broader economy--plenty of money is circulating among the big financial institutions, but not much is circulating among individuals or households or even among business that actually produce goods and services. If the goal is to get some people to make things, and then other people to buy those things, this has got to be just about the worst way to accomplish that.
Second, regarding the prohibition on usury in Islamic thought (and probably also in Jewish thought, but I'm even less of an authority on that), the way I've always seen it was that lending money for interest is almost inevitably exploitative. It's preying upon the needs of those who have less, making them pay more money in the end than they would have had to pay if they had actually had enough to pay for $THING (whether it's education, a house, or a winter coat) than if they had had enough to pay for it in the first place. This might be justifiable as something other than predatory if it happens only among people who are doing reasonably well, but need a loan for convenience's sake, but it's unconscionable when credit is extended to people who won't reasonably be able to pay it back. Which I now realize is pretty much exactly what you said, but I'm going to leave it because I think I'm looking at it more in terms of how it harms individuals, whereas you seem to be focusing on the collective damage.
Third, oh goodness would the business community ever not like having an absolute cap on profits. But, regardless of who wouldn't like it, I agree with you. Because they're not just accumulating all that money for the sake of accumulating money, they are translating their billions into political power. And there is no way democracy can survive in any meaningful form if the system is "1 dollar=1 vote".
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timeasmymeasure
More thoughts from another non-economist
Excellent points all around, and I have a couple more that I've been stewing on.
First: resetting everyone's debt to zero would probably be the best conceivable economic stimulus package right now. If people are forking over huge portions of their income to lenders, that's money they're not spending on shoes or bicycles or washing machines or paint. Ultimately, massive debt burdens are taking money out of effective circulation in the broader economy--plenty of money is circulating among the big financial institutions, but not much is circulating among individuals or households or even among business that actually produce goods and services. If the goal is to get some people to make things, and then other people to buy those things, this has got to be just about the worst way to accomplish that.
Second, regarding the prohibition on usury in Islamic thought (and probably also in Jewish thought, but I'm even less of an authority on that), the way I've always seen it was that lending money for interest is almost inevitably exploitative. It's preying upon the needs of those who have less, making them pay more money in the end than they would have had to pay if they had actually had enough to pay for $THING (whether it's education, a house, or a winter coat) than if they had had enough to pay for it in the first place. This might be justifiable as something other than predatory if it happens only among people who are doing reasonably well, but need a loan for convenience's sake, but it's unconscionable when credit is extended to people who won't reasonably be able to pay it back. Which I now realize is pretty much exactly what you said, but I'm going to leave it because I think I'm looking at it more in terms of how it harms individuals, whereas you seem to be focusing on the collective damage.
Third, oh goodness would the business community ever not like having an absolute cap on profits. But, regardless of who wouldn't like it, I agree with you. Because they're not just accumulating all that money for the sake of accumulating money, they are translating their billions into political power. And there is no way democracy can survive in any meaningful form if the system is "1 dollar=1 vote".