Overflight, 148
“When banks place credits into your checking account, they are merely pretending to lend you money. In reality, they have nothing to lend. Even the money that non−indebted depositors have placed with them was originally created out of nothing in response to someone else’s loan. So what entitles the banks to collect rent on nothing? It is immaterial that men everywhere are forced by law to accept these nothing certificates in exchange for real goods and services. We are talking here, not about what is legal, but what is moral. As Thomas Jefferson observed at the time of his protracted battle against central banking in the United States, «No one has a natural right to the trade of money lender, but he who has money to lend.»
Centuries ago, usury was defined as any interest charged for a loan. Modern usage has redefined it as excessive interest. Certainly, any amount of interest charged for a pretended loan is excessive. The dictionary, therefore, needs a new definition. Usury: The charging of any interest on a loan of fiat money.
Let us, therefore, look at debt and interest in this light. Thomas Edison summed up the immorality of the system when he said:
«People who will not turn a shovel full of dirt on the project nor contribute a pound of materials will collect more money … than will the people who will supply all the materials and do all the work.»
Is that an exaggeration? Let us consider the purchase of a $100,000 home in which $30,000 represents the cost of the land, architect’s fee, sales commissions, building permits, and that sort of thing and $70,000 is the cost of labor and building materials. If the home buyer puts up $30,000 as a down payment, then $70,000 must be borrowed. If the loan is issued at 11% over a 30−year period, the amount of interest paid will be $167,806. That means the amount paid to those who loan the money is about 2½ times greater than paid to those who provide all the labor and all the materials. It is true that this figure represents the time−value of that money over thirty years and easily could be justified on the basis that a lender deserves to be compensated for surrendering the use of his capital for half a lifetime. But that assumes the lender actually had something to surrender, that he had earned the capital, saved it, and then loaned it for construction of someone else’s house. What are we to think, however, about a lender who did nothing to earn the money, had not saved it, and, in fact, simply created it out of thin air? What is the time−value of nothing?”
G. Edward Griffin, The Creature from Jeckyll Island, A Second Look at the Federal Reserve