What's wrong with change?

[Dream]

So you think it's reasonable to have interest rates as high as 25% in some instances?

I remember I had a Structure card, the interest rate was 21%. That was as low as it'd go.

Depending on the CPI and COLA, yes.

Will I have to get a mortgage, yes, I will eventually. However, a mortgage is somewhat different. You are paying interest on an item which is appreciating in value, not depreciating.

But the bank is not going to give you a loan for nothing. They aren't doing it out of the goodness of their heart. If banks weren't allowed to make a profit, do you really think they'd want to give you a loan?

 

[nyj]

But the bank is not going to give you a loan for nothing. They aren't doing it out of the goodness of their heart. If banks weren't allowed to make a profit, do you really think they'd want to give you a loan?

Yes, and the banks have people to employ and financial partners to keep happy, so that in turn, they do not pull out, leaving the bank to go belly-up and its employees to wind up on the unemployment line.

Usury ties in directly to greed. When does it become "too much"?

 

[geocajun]

Of course, I personally have sworn off all credit cards. I pay with cash, and only with cash. I do not spend outside of my means, I do not borrow to buy what I cannot afford then and now. I do not think I have a negative impact on the economy because of my spending habits.

Will I have to get a mortgage, yes, I will eventually. However, a mortgage is somewhat different. You are paying interest on an item which is appreciating in value, not depreciating.

I have the same practice, however, I also take loans for automobiles.

 

[Dominus Fidelis]

I would have the same practice, but I have a wife.

 

[Dream]

Yes, and the banks have people to employ and financial partners to keep happy, so that in turn, they do not pull out, leaving the bank to go belly-up and its employees to wind up on the unemployment line.

And they're not going to be able to pay their employees without making a profit. So not allowing to charge interest is not only going to hurt the couple who wants to buy a house, but it will also hurt the entire banking industry on top of millions of small business owners.

Usury ties in directly to greed. When does it become "too much"?

I know, I'm not denying that it ties directly to greed. But if we got rid of all profit on loans, this economy would be a downward spiral. It will hurt everybody.

 

[geocajun]

I would have the same practice, but I have a wife.

so do I. It wasn't easy curbing our spending habits, but it can be done

 

[Roald]

I like to think of usury as greedily taking something for nothing.

Banks serve a valuable social function.

I put my money in a savings account, and I receive interest to recoup my inflation losses. (Usually, at a net loss to me.)

The bank takes this money and loans it to those who need it, with the interest that they will need to repay me.

In addition, the bank workers are not nuns; they need to be paid for their work. (We cannot muzzle the oxen...) To pay them, additional interest is tacked on to the loans.

The way that banks work today, almost all of the bank's income goes to overhead and wages. There is nothing wrong with a fair wage.

The profit that goes back to the owners can be justified by the risks that they took in starting a bank or investing in a bank.

If anyone along the way takes more than is fair and just, then it would likely that they have committed a wrong. This is certainly possible in our financial system but not unavoidable. (See It's a Wonderful Life.)

 

[nyj]

And they're not going to be able to pay their employees without making a profit. So not allowing to charge interest is not only going to hurt the couple who wants to buy a house, but it will also hurt the entire banking industry on top of millions of small business owners.

I agree! No one is not talking about not charging interest, we're talking about charging exhorbitant levels of interest. That's usury.

 

[Roald]

Also, inflation definitely occured in Medieval times. I have been studying the property law of the time, and things were quite different back then. Fungibility is just not what it used to be.

Interestingly, my studies have often focused on feudal tenants. If you heard about some of these tenants, you might think that they were slaves.

 

[Dream]

I agree! No one is not talking about not charging interest, we're talking about charging exhorbitant levels of interest. That's usury.

This is what you said earlier:

My understanding is, is that if the Catholic loans money to a friend and charges interest in an attempt to make a profit, that is the sin. If interest is charged, such that the Catholic making the loan recooperates the value of that money, as if they had kept it themselves (ie: factoring in inflation), that is not a sin.

Now are you now saying it is alright to make a little profit or are you still holding by your previous conviction that all profit-making off of loans are wrong?

 

[nyj]

Now are you now saying it is alright to make a little profit or are you still holding by your previous conviction that all profit-making off of loans are wrong?
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When an individual Catholic is a bank, then we'll talk. I'm pretty sure I differentiated the two somewhere in this thread.

 

[Dream]

When an individual Catholic is a bank, then we'll talk. I'm pretty sure I differentiated the two somewhere in this thread.

So it is acceptable for a bank to make a profit, but it is not acceptable for an individual to make a profit?

 

[nyj]

So it is acceptable for a bank to make a profit, but it is not acceptable for an individual to make a profit?

First of all, like I said earlier (are people not reading what I'm writing), financial institutions as distinct entities are not subject to the Catholic Church. I don't recall the last time KeyBank informed me that their business practices were now dictated by Canon Law. As such, if I am in Rome, I play by the Romans rules. If I think a financial institution is corrupt, I will not do business with them.

Second, it is allowable for a bank to make a reasonable profit so they can do what we've spoken about above (ie: keep the company afloat, pay salaries, pay off failed risks, etc etc). The question always revolves around "When does enough become simply too much?"

Third, a Catholic individual should not seek to make a profit from loaning money, but should look to simply recooperate the actual value of the money lent. If that entails charging interest to account for inflation and the like, that is acceptable.

Like I said earlier: If we loan money, individually, we are not financial institutions. You should never demand payment over and above what you are owed. In other words, you should not be going around loaning money to friends and family and expecting to make a profit.

Loan sharking is not an acceptable job for a Catholic.

 

[RhetorTheo]

Defens, it appears (correct me if I am wrong) that you have recognized that certain very important doctrines have... let's say "evolved." Charging 50% annual interest on poor people was a truly horrid practice before, while it's perfectly okay today. You are told that you must believe the Church did not change her teaching on faith and morals, and you are looking for a way to reconcile the historical facts with the dogmatic requirements.

Unfortunately, arguing that the Church can change teachings on faith and morals like they are mere rules just won't do. Typical attempts are: the teaching was not faith and morals it was disciplinary; the entire makeup of the universe changed such that the rule no longer applies, though it clearly seems to; the rule has not changed, it has evolved; the thing in question is not a true application of the rule. You can come up with new ones, for sure, but saying "binding and loosing" allows the Church to change matters of faith and morals will get you shouted down.

 

[RhetorTheo]

BTW, when our parish buys our new church from the Roman diocese, we will be charged interest.

 

[RhetorTheo]

Did the Church really just say "usury is wrong, but we refuse to define what the heck we are talking about"? I could have sworn that the Church explicitly opposed charging interest on loans, not some vague "too greedy" standard.

 

[RhetorTheo]

Money was definitely money back then. They had inflation, future value of money received today, etc. Absolutely, positively no change in the nature of commerce or money that would make usury okay today if it was wrong back then.

 

[RhetorTheo]

Slavery is now called an intrinsic evil. Given what JPII has said, I don't think a Catholic can argue that slavery was okay then but not now, or that some kinds of slavery are okay but not others. (Protestants, of course, are free to make such arguments.)

 

[nyj]

5 posts in a row Rhetor. That might be some sort of record. Too bad my post will break that streak for you. You were on a roll.

 

[Michelina]

A knowledge of Economics and History are required in order to understand how principles are applied differently in different circumstances.