The Defias Blog

Without getting too deep into the politics of this year’s US Presidential election, I wanted to show my support for the McCain/Palin ticket. I don’t think that ’spreading the wealth’ around is the way to go to ‘fix’ the economy. I think that our insistance on playing with imaginary money is what broke the system and I believe that Alan Greenspan plainly stating that he did not understand what went wrong and that the current situation goes against everything he’s made a career out of knowing supports the idea that the only way to fix the system is to replace the system.

When I say imaginary money, I’m referring to things like compound interest, predatory lending, that sort of thing. If I borrow 100 dollars from you at 5% interest rate and can’t pay it, you assess late charges which I still can’t pay so you end up selling the debt to a collection agency which applies more fees and charges interest on the interest of the fees incurred by the original interest which has interest charged on it. Now, riddle me this: If I couldn’t pay back the 100 dollars at 5% interest, what makes you think I can pay back the resulting $5,000 of compound interest and late fees? Yet, for the last twenty years our entire financial world has been built on that concept.
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