In modern discourse, the notion of usury as a sin is seldom discussed despite the financialization of our societies. By definition, usury implies a high or exorbitant rate of interest, so it has been reduced to images of mafia loan-sharks, payday lenders, and laws that establish maximum interest rates often seen on credit cards. The Law of Moses forbade charging interest to countryman, but not to the foreigner (Deuteronomy 23:19-20). Historically, interest rates hovered around those of the maximum APR’s allowed by modern law, so when one reads of interest or usury in Scripture, the text is not discussing 5% APR, but likelier 25%.
Following the 2008 Financial Crisis interest rates descended to all time lows, which was a continuation of a trend since the 1980’s. Only because of inflation caused by both Donald Trump’s mismanagement of Covid and related spending, and Joe Biden’s wanton “build back better” agenda have interest rates been hiked by the Federal Reserve. For the record, Fed Chairman Jerome Powell was appointed by Donald Trump. The Fed operates under a false paradigm that increasing unemployment, thereby reducing demand, is required to combat inflation, which means they are increasing interest rates to slow down consumer demand. Already the layoffs have begun with major tech companies and the economy has undergone an unacknowledged recession in the first half of 2022. The true solution to combating inflation is a drastic decrease in federal spending, the primary driver of this inflation.
Whereas usury generally refers to the excessive rate of interest, the debasement of our currency is itself excessive thereby becoming usury by means of inflation. Simply put, the devaluing of the money is equivalent to exorbitant interest. Again, in biblical times, and until the 20th century, money was based on precious metals, like gold, silver, copper, and nickel. Physical assets were the basis for a medium of exchange. Interest rates were a response to the supply and demand of money, based on the supply of these tangible assets. The US Dollar is backed by nothing, but the government will jail those who refuse the remittance of taxes in their currency or force regime change on dictators that attempt to subvert the currency.
Basically, the Federal Reserve, in increasing interest rates on Monopoly money, extorts the poor and middle class when entering the housing market or shopping for a vehicle. These are the two most expensive purchasing decisions a person will make in their life. Between 2015 and 2021, the average new auto loan was 4.82% which now approaches and now surpasses 7% for many consumers with good credit, and it is higher on used vehicles. On the 30-year fixed rate mortgage, the average rate between 2010-2021 was 3.91%, but following aggressive rate hikes by the Fed, the average since April of 2022 is 6.02%, now hovering in the mid 6% range. When applied to a monthly payment, this constitutes hundreds of dollars per payment that the consumer is being taxed by the central banking system, especially as the median sale for a house has increased 41% since 2018. Bipartisan Congressional spending created a housing bubble and monetary policy extorts it.
This impacts the abilities of Americans, particularly those of younger generations, seeking to purchase homes, sign rental agreements (rent is tied to property values and interest rates), purchase vehicles, and overall career opportunities. This is after many have been fed a pipe dream of an expensive college education, thus racking up additional consumer debt.
Worry not! Joe Biden has a solution: make the wealthy with good credit subsidize the poor with horrible credit through the implementation of new fees on mortgages beginning in May.
Per Marketplace Homes, the plan will enact the following:
Under the new rules, borrowers with credit scores above 680 will receive loan fee increases to subsidize fee reductions for borrowers with lower credit scores.
For instance, a homebuyer with a 740 FICO credit score who pays a 15% to 20% down payment will pay a 1% surcharge — an increase of 0.75% from the previous surcharge of 0.250%.
Meanwhile, credit homebuyers with scores under 679 will have reduced rates. A borrower with a 620 FICO credit score and a down payment of 5% will get a fee reduction of 1.75%. After being absorbed into the long-term mortgage rate, this is around a 0.4% to 0.5% discount.
Though it is estimated that this would amount to around $40/month for a loan of $400K, this is a capricious tax on borrowers with good credit. Nominally, this amounts to $14,400 over a 30-year period. When accounting for the Time Value of Money at the aforementioned average rate of 3.91%, this is over $27K in costs to the borrower, meaning they are deprived the ability to earn value on this $40/month. The arbitrary and excessive nature of this socialist policy renders it usury.
Yet it is also Social Justice. There is a longstanding narrative that financial institutions are racists against blacks and the credit system disproportionately harms them because they have poorer credit. It is the “system” that is causing the disparate impact, not the terrible financial decisions and materialism that Thomas Sowell writes about in Discrimination and Disparities which prevents the black community from acquiring generational wealth.
Theoretically, a 677 credit score either means an individual struggled and is recovering from bad credit or is perhaps overextended and indebted. Nevertheless, this is the narrative the Biden Regime is pushing as they seek to make whites, Asians, and even Hispanics pay for disproportionately black borrowers by charging them additional fees based on credit or down payment.
When extrapolating for younger Americans, the leftist Urban Institute presses this narrative, but focusing on Americans under 30, where the disparities are most visible. They basically conclude that young blacks in predominantly black communities are subprime borrowers.
Rather than address the causes of why black credit decreases for these cohorts, while Hispanics and whites either increase or remain the same, the cause is racism, and the Urban Institute contends bold solutions are required to remedy this disparity, which can only be the result of Jim Crow laws rather than poor decisions. So the Biden Regime has proposed this policy of exaction rooted in social justice.
Conclusions
‘If one of your brethren becomes poor, and falls into poverty among you, then you shall help him, like a stranger or a sojourner, that he may live with you. Take no usury or interest from him; but fear your God, that your brother may live with you. You shall not lend him your money for usury, nor lend him your food at a profit.
Leviticus 25:35-37 NKJV
A nation that does not fear the Lord will inevitably extort its own people. Just as America hates what Leviticus states regarding sexual deviancy, so too there is despisal for what is stated regarding usury. Managing an economy to the detriment of the poor and middle class is itself an injustice, yet rather than remedy these extortions by capping mortgage rates, not lending to unqualified buyers, and curtailing federal spending, the government and central banking institutions would rather have the plebeians suffer and become impoverished as a result of their actions.
Naturally, the citizenry is not without blame for their participation in the political process and public hysteria over a flu that wrecked the global economies. Therefore, the current circumstance is a self-fulfilling judgment upon the nation, and truly the only recourse is for America to become more fixated towards God lest the suffering continues.
2 Responses
Excellent article, Ray. Fiat money does indeed make it much easier for them to obfuscate and hide their shady dealings. And it absolutely can be a mechanism for excessive usury. Right now the Federal Reserve is trying to constrict the money supply through higher interest rates, while the Federal Government is increasing the money supply via spending. The end result of that conflicting policy is rampant inflation, which harms the poor the most because the poor are always the last to catch up. And that drives more into dependency on government and the taxpayers. Rinse and repeat. It is a vicious cycle.
What it most hides is regulatory, tax, and other burdens which bloat and draw money out of the supply side, driving up the real cost of products and services. And that is a problem that cannot be fixed with monetary policy or attempting to manipulate demand. The increased real cost of that product or service, and by extension our cost of living, remains higher regardless of the amount of money in circulation, and regardless of the amount of economic activity. No amount of improved efficiency or mass production can reduce the real cost enough to make up for all that the government extracted out at every stage. Government spending cannot fix it. Monetary policy cannot fix it.
And it is going to get worse. We’re headed for the time when the Bible says a loaf of bread will cost a day’s wages. It is happening because God is allowing it to happen. Judgment is coming.
But believers need not worry or fear. They cannot outsmart the Lord. He has ways of making all things work together for good. If we trust Him, He will provide.
Usury is a good word for it. Ultimately it is using, and basically enslaving, people to build the imagined utopia of the powers that be. Ultimately, as more are driven onto the dole, to beg the government for pennies when they should be earning dollars, as government takes more and more, spends more and more, and funnels more of that money supply through itself, leveraging more control, the end result will be communist – total usury – total slavery.
It always most harms the poor and small business. Their wages/incomes lag behind for a longer time. They’re the first to be laid off, have to severely cut back, or shut the doors altogether. What little money they have in their pocket is constantly losing buying power. The cost of living is constantly going up.
But the powers that be know they’re bleeding the turnip dry, and they’re doing it on purpose. That’s what people need to understand. The ones calling the shots don’t have any interest (pun intended) in fixing the problems.
The move to digital currency, if it succeeds, will just about set their wicked ways in stone. Adding another level of usury by monitoring, manipulating, and controlling what we buy, which will essentially, once and for all, confine us to the bounds of their plantation.
It is usury on many levels. Little short of slavery on many levels. And there is no question that it is evil.