Canada Bans Interest On Interest

[Economy 52,844]

https://globalnews.ca/video/9812997/freeland-announces-financial-protection-for-mortgage-holders

 

In order to help manage the surging interest rates and those with mortgages they cannot afford, Report Prime Minister Crystal Freeland announced new guidelines for banks for those struggling to refinance

 

The biggest change is interest on interest is not to be applied

 

Basically, if you can no longer cover your interest payments while interest rates remain high, any increase in your mortgage owing as a result of unpaid interest cannot be compounded with additional interest

 

For example, if you pay $2000/month on your mortgage but your interest payments rose to $2200, the remaining S200 you cannot pay gets added as principal to your balance as a negative amortizing mortgage... That unpaid $200 in terested that was added to your balance must not have interest applied on top of it again as it already is interest

[calmar 22,768]

interestception cancelledt

[gumzy3000 7,898]

We should just ban interest all together. Charge a one time fee for borrowing money but that's it. Interest only harms people who aren't rich as wealthy people can just take their money and buy things upfront. Poor people have to take loans/mortgages because they do not have the money. The interest they pay will go to banks/individuals who will only get richer without really doing anything... How is this fair? 

[Naak Le Vaar 1,222]

2 minutes ago, gumzy3000 said:

We should just ban interest all together. Charge a one time fee for borrowing money but that's it. Interest only harms people who aren't rich as wealthy people can just take their money and buy things upfront. Poor people have to take loans/mortgages because they do not have the money. The interest they pay will go to banks/individuals who will only get richer without really doing anything... How is this fair? 

This is a rich man's world and we're playing his game. There's no winning, at least not for 99% of the population 

[gumzy3000 7,898]

2 hours ago, Naak Le Vaar said:

This is a rich man's world and we're playing his game. There's no winning, at least not for 99% of the population 

Unfortunately true, but I really do hope I live in a lifetime where we can overthrow the big banks and have some new system that doesn't take advantage of anyone that isn't rich. 

[Economy 52,844]

3 hours ago, gumzy3000 said:

We should just ban interest all together. Charge a one time fee for borrowing money but that's it. Interest only harms people who aren't rich as wealthy people can just take their money and buy things upfront. Poor people have to take loans/mortgages because they do not have the money. The interest they pay will go to banks/individuals who will only get richer without really doing anything... How is this fair? 

It's a sick side of capitalism but at the same time there would be a lot of implications of getting rid of interest

 

-without interest how do u ensure ppl bother to try to pay back at all? Or not take their sweet time?

- What about inflation? (Without interest you are paying back less than what you borrowed)...

-What about defaults? When ppl can't pay loans, a portion of the profits pay for those defaults

- what about the money for the lending itself? Without interest they also cannot pay interest on deposits, bonds GICs etc to lend it in the first place

- what about our pension systems? Our retirement funds including the government ones rely so heavily on fixed income (bonds included which require interest) in order to grow. Even the portion of equities (stocks) that pension funds invest on is heavily weighted by the financial sector

 

To get rid of the interest concept, u would have to go to some serious communist system to make that work. It's completely incompatible with the modern economy.

 

I agree there's greed behind it. But it's also not possible to eliminate it the way things work. Ud have to tear down the entire economic system and rebuild it from scratch with an entirely different concept. That's the only way. But good luck with that 

[Economy 52,844]

35 minutes ago, gumzy3000 said:

Unfortunately true, but I really do hope I live in a lifetime where we can overthrow the big banks and have some new system that doesn't take advantage of anyone that isn't rich. 

Read my comment above. I should have quoted u as well

 

It's a lot more complicated than just overthrowing banks. The entire system runs in a way that requires interest. U can't simply ban the greedy banks from charging interest and say problem solved, now u got an entire system that runs on it that completely collapses

 

I'm not saying humanity as a race can only survive on a system with interest. I'm saying the society we built does, and it's not as simple as just regulating it or trying to eliminate greed. Ud need to resign the entire economic system from scratch

 

So I wouldn't hope too hard to see that in ur life time. I seriously doubt it will happen

[HiddenWeirdo 4,278]

3 hours ago, gumzy3000 said:

We should just ban interest all together. Charge a one time fee for borrowing money but that's it. Interest only harms people who aren't rich as wealthy people can just take their money and buy things upfront. Poor people have to take loans/mortgages because they do not have the money. The interest they pay will go to banks/individuals who will only get richer without really doing anything... How is this fair? 

Interests to banks are like oxygen to human beings. No interests, no banks 

[gumzy3000 7,898]

40 minutes ago, Economy said:

It's a sick side of capitalism but at the same time there would be a lot of implications of getting rid of interest

 

-without interest how do u ensure ppl bother to try to pay back at all? Or not take their sweet time?

- What about inflation? (Without interest you are paying back less than what you borrowed)...

-What about defaults? When ppl can't pay loans, a portion of the profits pay for those defaults

- what about the money for the lending itself? Without interest they also cannot pay interest on deposits, bonds GICs etc to lend it in the first place

- what about our pension systems? Our retirement funds including the government ones rely so heavily on fixed income (bonds included which require interest) in order to grow. Even the portion of equities (stocks) that pension funds invest on is heavily weighted by the financial sector

 

To get rid of the interest concept, u would have to go to some serious communist system to make that work. It's completely incompatible with the modern economy.

 

I agree there's greed behind it. But it's also not possible to eliminate it the way things work. Ud have to tear down the entire economic system and rebuild it from scratch with an entirely different concept. That's the only way. But good luck with that 

Interesting points to consider for sure. If we can not eliminate interest, we need to have more regulations to ensure its a bit more fair for everyone. Interest for mortgages is probably the biggest player of all... more reason we need universal housing in the end of the day. 

[Economy 52,844]

25 minutes ago, gumzy3000 said:

Interesting points to consider for sure. If we can not eliminate interest, we need to have more regulations to ensure its a bit more fair for everyone. Interest for mortgages is probably the biggest player of all... more reason we need universal housing in the end of the day. 

Oh no for sure. I think regulation can at least help put a cap on abuse and exploitation (like this regulation on OP) to prevent greed from going too far.

 

I'm just saying the way our financial system and transactions work (of which interest is an extremely major component of) are a major foundation in which our entire economic system was built on. You cannot simply remove it, the system won't work and will collapse.

 

It's like a human body, if u yanked out a critical foundational component like the heart, kidneys, brain etc, it simply could not function because those vital organs are a foundation. Like a pillar to the entire system. U can't really tweek it out of the system. If future scientists tried to design a human in a lab without a heart, he couldn't tweek the system, he'd have to design an entire different body from scratch that functions totally differently 

 

Same our economic system. I am not saying it's the best system possible, it sucks in so many ways. Just acknowledging that the way this system was built, it has foundations it can't function without. I don't think u can really tweek the system and do something as drastic as remove interest interest and hope the system would still function, (tho I believe minnor regulations as I said are possible and beneficial). You would have to be willing to re-design the entire system from scratch. Which would require a lot of will and consensus and I just don't see it happening in our life time

 

Really building an equal system in which ppl worked just for the greater good of society and didn't need an incentive to do so, and one where greed an exploitation don't exist and wouldn't be required to drive Innovation, investment etc would be the ultimate achievement of any civilization. I do not think the human race is capable of that at this time. We are too greedy by nature (and if we're gonna be totally honest it's not just the rich, they are humans like us, they are not genetically different, the difference is they have enough power for their greed to influence others a lot more than everyday ppl and to make it felt. But many of us wouldn't work half as hard as we do if there was nothing in it for us, that's a display of the same tendency to think "me, "me", "me")

 

If we ever meet an alien race that made this system work. We should look to them as a holy grail of morality and maturity tbh