It’s the Interest, Stupid! Why Bankers Rule the World
By Ellen Brown Global Research, November 08, 2012
In the 2012 edition of Occupy Money released last week, Professor Margrit Kennedy writes that a stunning 35% to 40% of everything we buy goes to interest. This interest goes to bankers, financiers, and bondholders, who take a 35% to 40% cut of our GDP. That helps explain how wealth is systematically transferred from Main Street to Wall Street. The rich get progressively richer at the expense of the poor, not just because of “Wall Street greed” but because of the inexorable mathematics of our private banking system.
This hidden tribute to the banks will come as a surprise to most people, who think that if they pay their credit card bills on time and don’t take out loans, they aren’t paying interest. This, says Dr. Kennedy, is not true. Tradesmen, suppliers, wholesalers and retailers all along the chain of production rely on credit to pay their bills. They must pay for labor and materials before they have a product to sell and before the end buyer pays for the product 90 days later. Each supplier in the chain adds interest to its production costs, which are passed on to the ultimate consumer. Dr. Kennedy cites interest charges ranging from 12% for garbage collection, to 38% for drinking water to, 77% for rent in public housing in her native Germany.
Her figures are drawn from the research of economist Helmut Creutz, writing in German and interpreting Bundesbank publications. They apply to the expenditures of German households for everyday goods and services in 2006; but similar figures are seen in financial sector profits in the United States, where they composed a whopping 40% of U.S. business profits in 2006. That was five times the 7% made by the banking sector in 1980. Bank assets, financial profits, interest, and debt have all been growing exponentially.
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By 2010, 1% of the population owned 42% of financial wealth, while 80% of the population owned only 5% percent of financial wealth. Dr. Kennedy observes that the bottom 80% pay the hidden interest charges that the top 10% collect, making interest a strongly regressive tax that the poor pay to the rich.
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In 2011, the U.S. federal government paid $454 billion in interest on the federal debt—nearly one-third the total $1,100 billion paid in personal income taxes that year. If the government had been borrowing directly from the Federal Reserve—which has the power to create credit on its books and now rebates its profits directly to the government—personal income taxes could have been cut by a third.
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It’s the Interest, Stupid! Why Bankers Rule the World | Global Research
http://www.globalresearch.ca/its-the-interest-stupid-why-bankers-rule-the-world/5311030
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The 5 Percent Solution: How 5 Percent of the Workforce Generated 40 Percent of U.S. Business Profits and all of it was a Ponzi Scheme.
From 1948 to the early 1980s the financial industry in the U.S. generated from 5 to 15 percent of all U.S. business profits. In the early 1980s this started to creep higher and higher. It reached a triumphant climax generating over 40 percent of all U.S. profits at the height of our financial bubble. The only problem of course is the financial sector generated the largest Ponzi scheme known to humankind. The 2000s should go down as the decade of the Ponzi economy. It is almost fitting that the poster child of this excess ended up being Bernard Madoff who ironically was chairman of the board for NASDAQ at one point in his career.
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The 5 Percent Solution: How 5 Percent of the Workforce Generated 40 Percent of U.S. Business Profits and all of it was a Ponzi Scheme. | Finance my Money
http://financemymoney.com/...nt-solution-how-5-percent-of-the-workforce-generated-40-percent-of-u-s-business-profits-and-all-of-it-was-a-ponzi-scheme/