Do You Believe in Usury?|
|Date:||February 4th, 2009 02:54 am (UTC)|| |
So if I lend you money for 25 years at 5%, that's morally questionable; but if it's a 1-year loan, and at the end of that year you repay me and borrow the money again, repeat for 25 years, that's fine because each loan is only 5% total interest? Did you notice that there really isn't any difference between the two cases, except a check going back and forth each year?
I don't get your logic, Seth. If I need 25,000 now and can pay it back in 25 years (roughly 1,000 per year), the comparison is not to paying and borrowing 25,000 every year for 25 years, it's to borrowing 25,000 the first year, 24,000 the second year, and so on down to 1000 the 25th year. Is it not?
|Date:||February 4th, 2009 04:35 am (UTC)|| |
For simplicity, I was assuming a loan that paid interest only until maturity. (And even if it amortizes, that just means that each year you borrow less, equal to the amount the 25-year loan would have as its balance on that date.)
My point is that the same transaction can be structured as a single loan or a series of loans, with the same cashflows, so why should one be morally different from the other?