Appendix Three – Deleterious Effects of Interest

Interest (Riba) is a curse on the world. In Aachen, Germany, interest is 12% of the cost of rubbish collection; 38% of drinking water; 47% of sewage; and 77% of public housing. Furthermore, over the period 1950-1989, German GDP increased twenty two times, but interest on the National Debt increased seventy five times!

50% of the price of all goods and services relates to borrowing. Generally, interest causes 80% of the people to pay out more than they receive; 10% are in balance; and 10% receive more than they pay out (Kennedy, 1995).

Social consequences of interest

In India high interest causes farmer suicides – one every half hour (Sharma, 2006). 200,000 farmers committed suicide between 1997 and 2010 (Rupee News, 2010,). Many farmers have to sell one of their kidneys.

Cost of capital projects doubled or trebled: clean water/electricity generation prevented

The cost of capital projects is doubled, tripled, quadrupled or more by the use of interest-bearing money particularly when the interest is compounded.

Consequently, every day in the world, ten thousand people die from the effects of dirty water (Dirty water.). Good water supply and sewage systems use well-established technology but, in practice, because of compound interest, such projects cannot be built or, if they are built, the cost is inordinate.

Consider the UK Humber Bridge. Starting at £28,000,000, compound interest (with some price rises) took the cost of the Bridge to £439,000,000. That’s fifteen times higher! Yet the Bridge is profitable! Every year, its operating costs – repair, maintenance and salaries – are less than the fees received from travellers crossing the Bridge (Humber Bridge, 2019).

And it is the same with clean electricity generation. In the UK one project – tidal lagoons in the Severn estuary – would generate 10% of the UK’s electricity. Yet, because of compound interest, the project had to be cancelled.

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