Simple Liberty  

 

     
   
     

Monetary Reform

Chapter 5

Compound Interest

Written by Darrell Anderson.

“Is there any point to which you would wish to draw my attention?”
“To the curious incident of the dog in the night-time.”
“The dog did nothing in the night-time.”
“That was the curious incident.”

Sherlock Holmes, Silver Blaze, written by Arthur Conan Doyle

Creating currency backed by no wealth through the magic of a printing press and the color of law is one way to inflate a general circulating currency and erode exchange power, but that is only the tip of the iceberg. A much deeper and more serious mechanism exists to inflate a currency, erode future exchange power, and increase social disorder.

For a moment imagine a global market where, despite the division of labor, all wealth is directly exchanged for wealth. Imagine too that there is no significant time delay between these exchanges. In other words, currency is not used or needed.

In this world of direct exchange, durable wealth still possesses leasing value and with good reason. Durable wealth must be used in combination with labor to produce new wealth. In such a world, tractors still would help produce more corn than hoes and always will demand a higher leasing fee. Not all individuals who use a tractor necessarily want to own a tractor, so they instead choose to temporarily lease. All wealth is subject to decay and wear-and-tear. Thus, straightforward leasing fees make sense to offset that decay.

Leasing fees are a straightforward concept understood by most people. You might lease your lawnmower to a neighbor, and in exchange the neighbor leases you a garden tiller. There is a direct trade.

Now introduce some time delays into this otherwise imaginary market. In the spring you lease your neighbor’s tiller to prepare your garden, but your neighbor has no desire for your lawnmower until summer. Thus, by mutual agreement (actually a contract) you agree to lease your lawnmower to your neighbor come summer. However, your neighbor is the cautious type, and insists upon a token paper IOU to record the transaction. You agree and in the summer your neighbor hands you the IOU and rightfully expects to be able to use your lawnmower. Using the IOU does not change the fact that wealth was exchanged for wealth, and that durable wealth possesses leasing value. The only difference is the willingness to delay consumption — a low time preference.

To your aesthetic dismay suppose your neighbor decides that mowing the lawn is not so important and decides a bushel of apples would be more satisfying. For those apples your neighbor exchanges with another neighbor the lawnmower IOU. Later in the summer that second neighbor presents to you the IOU to use your lawnmower.

Notice in this multiple transaction that the function of the IOU did not change, and that existing durable wealth maintained leasing value as perceived by other people.

A large-scale circulating currency functions much the same as that singular IOU. A main difference is the currency may be used anywhere in the community, at any time, and currency does not specify the kind of wealth to be received. Like the singular IOU, using currency introduces a time delay when exchanging wealth for wealth. Currency is only a token symbol of an unfinished exchange of wealth. Currency is a claim check on a specific amount but unspecified kind of wealth not yet received. Possessing currency represents a low time preference — a willingness to forego wealth today for wealth tomorrow.

The concept of money — specifically the use of a general circulating currency — creates opportunities to build wealth beyond low time preferences. Durable goods also are called permanent wealth. Permanent wealth represents any tangible resource that can be used repeatedly to help further create wealth. Such wealth is called capital.[1] Because such wealth can be used repeatedly but is nonetheless subject to decay and wear-and-tear, that type of wealth creates various maintenance and replacement costs. Often, therefore, when people allow others to use their capital, they charge a leasing fee to help recover those costs.

Currency represents wealth not yet owned. Therefore, currency represents both perishable and permanent wealth — future assets — virtual wealth and future energy flows. Because currency can represent potential durable or permanent wealth, currency possesses a similar leasing potential as capital. However, if currency is nothing more than a placeholder — a token symbol of an unfinished exchange of wealth, then currency possesses no leasing value beyond that which actual capital possesses.

This is not how the current monetary system works. People today do not pay a straightforward leasing fee for using another individual’s currency as they would for leasing capital, but pay interest.

Some people have argued that interest is compensation for risk or that an owner of capital (capital, not currency) is rewarded with interest for having abstained from using that capital. However, interest arises as compensation for the lack of increase that capital usually provides.[2] Capital is wealth devoted to further producing wealth. Thus, not having access to capital necessarily implies not producing at the same capacity possible when using that capital in production. Therefore, interest is compensation for lost time — the difference between not using that capital and the increase one could have had.[3] In addition to compensating for decay and wear-and-tear, interest is compensation for the lack of increase one normally expects to receive by using that capital in production.

If the cost of borrowing currency were a straightforward leasing fee, then the name “interest” would be insignificant. However, the modern leasing fee of currency is compounded. Albert Einstein allegedly said that the greatest invention in the universe is compound interest.[4] Perhaps the famous scientist should know because compound interest is another way humans try to evade the physical laws described by physics to create virtual perpetual motion.

The concept of compound interest perverts the fundamental purpose of currency — to serve as a token placeholder for an unfinished exchange of wealth. Compound interest is not an attempt to derive compensation for the temporary loss of capital, decay, and wear-and-tear, but attempts to create wealth without any personal productive labor being expended — defying the order of the natural universe. Compound interest creates debt upon existing debt,[5] without creating a corresponding increase or production of wealth. Compound interest is an effort to perpetually capture the labor of other people.

Compound interest: with respect to the concept of money, the interest paid on both the unpaid principal and accumulated unpaid interest.

Such an eloquent sounding definition is an illusion of jargon to distract people from the sole purpose of a circulating currency. Such a definition sounds impressive, but is mere sleight-of-hand.

Compare the definition of compound interest to the definition of interest:[6]

Interest: the return received from leasing capital.

Individuals pay interest only because they do not possess the means or desire to produce the necessary capital. The lender believes the price the borrower is willing to pay exceeds the productive return the lender might have received by personally putting that capital to use.[7] Thus, interest is a normal and natural occurrence of human interaction.

Currency and capital are not the same thing. Capital is previously produced wealth used to further create additional wealth. Currency is a token symbol representing debt. Currency only represents potential or future capital — virtual wealth. People do not borrow for the sake of accumulating currency, they borrow only as means to obtain the wealth represented by that currency.[8] Currency is merely an agent through which people transfer or create capital.[9] Therefore, interest and compound interest are not the same thing. Thus, an important question is what should the fee paid for leasing currency be called? Interest? Usury? Monetization fee?

Another question that arises is what constitutes an acceptable and equitable fee for borrowing capital or the potential capital currency represents. The minimal criterion is to meet or exceed the increase the lender might have received by personally making use of that capital.

Once people recognize the important distinction between capital and currency, they should realize that the debt created by lending currency should be linearly proportional to the resulting production. Compound interest is calculated exponentially. That one characteristic dramatically transforms and distorts the aggregate flow of wealth. Like direct currency inflation through the printing press, compound interest inflates the currency and distorts the linear process of production and consumption.

The generic equation used to calculate both principal and interest is represented by:[10]

[Image: Mathematical equation for compound interest. Important to text. I wish I knew how to display this equation in text mode.]

where:

Bn = Loan Balance after n payments have been made
L = Loan amount
Ra = Equal Repayment amount
n = number of equal periods, usually months
i = interest rate per period expressed as a decimal

This exponential distortion is especially important when capitalizing any wealth production through the modern banking and monetary system. In a direct wealth-for-wealth exchange system (barter and trade), currency enters circulation only when there is an unfinished exchange of wealth. In such a system currency is an IOU representing an unfinished exchange of wealth. In the modern age, currency does not necessarily first enter circulation through exchanges of wealth, but often is introduced into circulation through the political privilege provided to bankers. In a wealth-for-wealth exchange system, the elements of production are land, labor, capital, knowledge, and skills. In the modern price exchange system, an additional element is introduced — the financier or banker.

That privilege provides tremendous leverage. Compound interest forces people into prolonged indentured servitude and exhaustive overproduction. To balance the aggregate flow of wealth, that aggregate overproduction requires aggregate overconsumption. Compound interest also requires a disproportionate amount of currency to circulate, thereby artificially inflating prices. The disproportion is not caused by the initial currency introduced (called principal in bookkeeping lingo), but by the ensuing increased velocity in circulation required in order for aggregate borrowers to pay the compounded interest.

When bankers introduce new currency into circulation, they produce only the principal. From where is the currency created in which one pays the compound interest of the loan? At first glance one might think through future production, but that production is largely meaningless in a global exchange system based primarily upon using a common medium of exchange. People exchange their products primarily through the common medium of exchange. Notice that the quantity of currency in circulation has not changed because only the principal is produced and introduced into circulation. Therefore, satisfying the contractual obligation of compound interest must be paid through existing circulation. Thus, within the aggregate the existing currency must circulate faster than normal in order for all people to exchange and meet the contractual obligations of a bank loan.

The factors of production are land, labor, capital, knowledge, and skills. Because capital is previously produced wealth used to further create more wealth, capital is a feedback mechanism affecting the overall flow of wealth (refer to Appendix A). Yet, unlike wealth-for-wealth exchange systems where that wealth must first be produced before being recycled back into further production, production ventures today are capitalized through banking and the instantaneous creation of currency. Compound interest therefore aberrantly changes the relationship of the entire social system.

Consider that the physical factors of land, labor, and capital often are made available through modern bank loans clouded by compound interest. Rent is the return received from leasing land, wages are the return from leasing labor (and knowledge and skills), and interest is the return for leasing capital.[11] Within a wealth-for-wealth exchange system, those returns are linearly proportional to actual production. However, within the modern exchange system, payments of rent, wages, and interest are not linear terms, but are affected by the exponential effects of compound interest. Those effects ripple and affect the entire flow of wealth and increase the costs of production, distribution, and consumption.

Further distorting the social system and the flow of wealth, the collected compound interest is paid to third parties who operate this monetary exchange system solely by political privilege, and those interest payments are not distributed as capital leasing fees to the individuals who directly participate in producing wealth. Thus, unlike a straightforward wealth-for-wealth exchange system where interest is a linear and a direct return for leasing capital, the modern politicized exchange system is completely changed because that interest is no longer being distributed to those individuals who create wealth.

Bankers operate by political privilege and siphon large proportions of the wealth produced for what amounts to a relatively small and simple clerical participation in the production of that wealth. That political privilege is an effective wealth redistribution mechanism that is seldom discussed in typical economic textbooks. All bankers create new circulating currency through political privilege, and do not venture their own capital or currency.

Natural tensions between saving and investing always exist. Those tensions would exist even in a wealth-for-wealth exchange system — how much crop to eat, how much seed to save to plant next year’s crop, and how much crop and seed to use for exchange. Currency systems, because of the associated time delays in claiming wealth, amplify the oscillations caused by those tensions because currency is not subject to the same rate of decay as actual wealth. Currency inflation and deflation further amplify those oscillations.

Compound interest amplifies those oscillations exponentially. Hence, the notorious booms and busts of modern economic cycles. Many people focus incorrectly on the mechanisms of central banking as the primary catalyst for currency inflation, but compound interest is the prime mover.

At the national level the printing press itself is not the damaging factor in currency inflation, if that currency is backed by true wealth. The primary damage occurs when the currency is issued by selling fictitious debt backed by no wealth, and selling those debt instruments attached with compound interest. The interest payments can be paid only through the existing circulating currency, and necessarily requires increased velocity of circulation. When not coupled with compound interest and backed by true wealth, issuing a currency from the printing press has worked well in U.S. history.

Suppose you wanted to lease your neighbor’s tiller for four hours. Your neighbor charges a fee of $5 per hour. Does $20 total sound reasonable? Probably. Now suppose your neighbor instead charges a fee of 1¢ for the first minute, 2¢ for the second minute, 4¢ for the third minute, 8¢ for the fourth minute, etc.[12] Sound reasonable? Hardly! Thirty minutes of use would cost you $5,368,709.12 and you more than likely never would lease the tiller. Such is the power of an exponent.

To emphasize further the problem of compound interest, suppose you were unable to return the tiller for 72 hours. Never mind paying a simple straightforward per-day fee, your total bill is $379,822,709! Bad luck? Poor contracting skills? Have you ever noticed that bankers and court judges rarely agree with such arguments?

No individual would accept such a deal when leasing physical capital. Why would an individual accept such a deal when leasing currency, when currency is nothing but a placeholder representing unclaimed future wealth?

Not only does the concept of compound interest distort the natural process of human exchange, compound interest is mathematically unstable. Ask any engineer or scientist what happens when exponents are introduced into equations. Rather than smooth linear outputs, such systems display curved and ramping outputs. Such outputs start with little change and initially can appear linear, but in the final phase ramp dramatically upward. The previous examples display that instability. In other words, there simply is not enough aggregate wealth to pay such an aggregate debt. Wealth exchanges are fundamentally linear processes. Compound interest, being exponential, is non-linear.

Human production and consumption are linear processes, regardless of how efficient those processes might become. The exponential nature of compound interest leads to the legal fiction of creating wealth out of ever-expanding debt. At first glance one might think that a linear process never could maintain pace with an exponential process. However, humans employ tools and technology to produce. With sufficient time many individuals can overproduce to balance the effects of compound interest. That overproduction, much of which goes to a political elite, is an efficient process but is nonetheless linear because humans can act only sequentially.

Although humans can produce only linearly, the effects of that sequential production could be non-linear. For example, consider a music artist who sequentially produces a record album, but receives a tremendous return for that effort. Sports athletes are another example. Those returns tend to exist in perpetuity with respect to typical exchanges. However, probably less than 1 percent of the global population possesses the potential and opportunity to create such non-linear results. The overwhelming majority of people are wage and salary earners who exchange their goods and services at approximately a one-to-one production ratio. However, the returns for such people are not related to the initial production, which is a linear, sequential process.

Notice the disproportionate timelines required to provide such overproduction. That massive overproduction helps explain why humans deplete natural resources at astronomical rates. Overproduction also means finding consumers to buy those products. Those consumers also must overproduce in order to create the necessary exchange power to obtain those overproduced products. Because of the high division of labor, every human is concurrently both a producer and consumer. Thus, everybody is stuck in this proverbial “rat race.” Every human is in a continual quest to overproduce in order to maintain the redirected energy flows represented by the compound interest found in the modern exchange system. The problem is not that humans want to consume without limit, but that compound interest introduces an unnatural imbalance in the typical linear relationship between producing and consuming. Thus, any social exchange system based upon the political privilege of compound interest is mathematically doomed to destruction as wealth is unduly shifted from producers to an elite group of managers and political parasites. Many people suffer and experience much grief and drudgery.

The rise of industrialization coincides with the advent of modern banking. This should surprise few people, because modern banking is based upon the premise of instantaneously creating currency. This instantaneous creation did much to enable industrialization.

Along with this ability to instantaneously create currency, compound interest enhanced the ability to accumulate future exchange power. Currency is not capital, but is a claim on future wealth or capital. Thus, accumulating this exchange power enhances massive capitalization.

Although currency inflation occurs through the printing press, that printing press is far more destructive through the concept of compound interest. Compound interest necessarily inflates a circulating currency. principal is issued into circulation but not the attached compound interest. Thus, the principal circulates much faster than necessary in order to increase production and satisfy debt payments. Increased velocity means demand exceeds supply — inflation. Other variables tend to offset the effects of this velocity increase, but as always, the effects of compound interest are amplified exponentially. Demand therefore increases exponentially while supply continues to increase linearly. Additionally, there is the immeasurable psychological effect of wanting to extinguish debts and that desire tends to increase velocity as well. People try to move money to make money. People also tend to raise prices of goods and services in order to combat the pressures of compound interest. Even if politicians and central bankers were eliminated from the monetary picture, inflation would continue to exist unabated in the current system because of compound interest. That eliminating central banking will resolve all inflationary problems is a tragic illusion. The most destructive element of currency inflation is compound interest — and always will be.

Only in the late 19th century, as industrialization began to flourish in full stride, did some perceptive people begin to visualize the effects of this process. Only in the last three generations or so, with the cumulative effects of a global population explosion, have people recognized those effects rippling throughout the entire global social system. The challenge today is few people look deep enough into root causes to appreciate the lethal social effects of compound interest. Most people stop investigating monetary theory with their discovery of the mechanics of central banking and never continue to discover the destructive effects of compound interest.

Nobody knows the embedded hidden costs and resulting social disorder caused by compound interest. However, consider a straightforward thought exercise. A 30-year home loan for $100,000 at 7.5 percent compounded interest will cost approximately $252,000. Thus, the borrower provides future labor at a rate of approximately 1½ times (150 percent) more than the original principal. The concept of equitable trade and exchange becomes meaningless. With respect to the lifetime of that one loan, to compensate for that additional cost of compound interest, the typical laborer must produce approximately 150 percent more than the actual wealth received. For that typical 30-year home loan, people spend 20 years overproducing and indentured to politically privileged third parties who produce no wealth directly. Yet the quantity of currency needed to satisfy the debt created by compound interest does not exist. Satisfying that debt must be found from the original principal introduced into circulation. Thus, currency circulation velocity must increase and the result is inflation.

Add individual automobile loans, credit cards, college loans, business start-ups, etc. Add the fact that everybody tries to pass costs and expenses to other people.[13] Estimating the cumulative cost of compound interest is impossible because of the recursive effects. With reasonable estimates, however, conceivably the overall additional lifetime labor required to pay for compound interest is anywhere from 150 percent to 300 percent of everything humans do. That is, the ripple effects of compound interest throughout the global social system requires everybody to overproduce and overconsume 1½ to 3 times more than is necessary to equitably sustain trade, exchange, and material progress. A 150 percent overproduction equates to a 60 percent lifetime loss of labor; at 300 percent a 75 percent loss.[14] That is, people work anywhere from 20 to 40 years beyond what is necessary simply to offset the effects of compound interest. The results of that lost productive labor is seen not by the laborer but by politically privileged third parties. Because of this excessive overproduction, compound interest is killing much of humanity and killing the planet. With all of the improvements in technology and production, people should be working far less than ancestors to support basic needs and wants, but experience just the opposite. Conflict continues to increase.

Some individuals might argue that from a property rights perspective people could not be prevented from contracting away rights. That is, if an individual wants to sign a contract to pay compound interest then nobody should be able to stop such a contract. After all, there is no trespass involved. Such a response initially seems true. Possibly the most powerful contractual right any individual possesses is the right to contract away rights.

Humans abide by certain general principles and rules. Those principles and rules are arbitrary as well as subjective. The concept known as compound interest is nothing but a long-standing custom of merchants and bankers that has survived for centuries merely through massive ignorance. Human social and legal rules are subject to change and can be changed.

Despite the seemingly almost endless right to contract, and regardless of the basic principles and rules of property rights and contracts, there are some exchanges that many people consider unacceptable and disruptive to expected social order. In legal jargon, such actions are called unconscionable contracts. For example, in most social environments, contracts of murder are unconscionable.

Once people understand the fundamental purpose of currency — without the smoke and mirrors — they would realize that any contract to pay compound interest is nothing but an effort to create virtual perpetual motion by capturing the labor of other people. Compound interest is debt being created out of debt without a corresponding exchange of wealth. The subsequent social effects are devastating. Based upon the concepts that promote mutual survival (self, property, rights, contracts, and consent), such a contract becomes unconscionable and should be unenforceable within that society. People do not need to forbid such contracts through any statutory law, they need only refuse to participate or recognize such contracts. Even the political elite often enact statutory prohibitions against pyramid schemes (except their own). Thus, people need only recognize that such schemes when created by political privilege are just as unconscionable and unenforceable.

Straightforward definitions of wealth and debt imply that any unfinished exchange of wealth automatically indentures the debtor to the creditor. By definitions alone, there is no way to escape this process — everybody is a “prisoner” of such a system because almost all exchanges are affected by the time domain. Even in a wealth-for-wealth exchange system a debtor-creditor relationship is created any time there is an unfinished exchange of wealth. You might trade your chicken eggs for some corn, but the corn will not be ready for consumption until autumn. Yet, if you do not trade today then your eggs will rot, decay, and become useless. Best to trade today and extend the corn grower credit.

Credit: The willingness to forego an immediate consummation of an exchange of wealth and to accept debt.

There is no way to forever avoid debt because all exchange systems are bound by natural limits and therefore necessarily create debt. The more important question becomes what is a fair and rational contract for leasing the wealth owned by another, or the currency that represents future wealth? Straightforward leasing fees or compound interest?

Modern bankers introduce currency into circulation through a privileged political permit. With mere bookkeeping entries, bankers create that currency by monetizing the debts of their customers. The principal of that loan is backed by the virtual wealth the local community of people soon will create through the use of the newly created currency. Such a loan provides a community service.[15]

The compound interest, however, creates further debt obligations without a corresponding production of equivalent wealth by the banker. No further clerical work is required to introduce $100,000 into circulation than $10. Thus, the banker is playing a game similar to counterfeiting game the politicians play through central banking — obtaining something for almost nothing. They do so not through the currency they create or the service they provide — the entire community receives the benefit of that currency, but by the compound interest they receive. Just as durable wealth commands an acceptable but straightforward leasing fee, bankers too should be limited to charging straightforward administrative fees for providing such a community service.

Consider that the same $100,000 loan at 7.5 percent simple interest — a proportional and linear leasing fee, would cost $7,500. That fee requires a 7.5 percent overproduction through the same 30-year period. Mathematically that fee must be paid through the existing circulating principal and technically is inflationary, and that fee is an exorbitant price for a mere bookkeeping exercise, but is far less destructive than 7.5 percent interest compounded exponentially. More importantly, a linear fee is sustainable through future production.

Consider another thought exercise. Compound interest is a difficult concept to conceive within a wealth-for-wealth exchange system. In such a system, only wealth is exchanged, with no common medium of exchange or currency existing. In such a system, capital (wealth) is leased in exchange for other forms of wealth, not currency. Because human production is a linear process, how would compound interest ever get introduced in such a system? How would one even calculate compound interest in such a system? Thus, because currency represents future wealth — a mere token placeholder of that wealth — on what basis is compound interest justified?

Although no direct trespass seems to occur in a contract of compound interest, a more long-term question must be addressed. Individuals choose to embrace mutual survival as a means to promote individual survival. When individuals are deceived with false and misleading definitions to accept contracts of compound interest, thereby indenturing people for many years, that society of people must ask if such an arrangement encourages mutual survival or eventually encourages individual survival only. When the desire for individual survival supercedes the desire for mutual survival, how long can any society of people remain secure in their pursuit of happiness? Attempting to create virtual perpetual motion by capturing the labor of other people through the concept of compound interest is a desire to bypass the natural physical laws of the universe. Such a desire is called greed. Greed is a willingness to ignore the property boundaries of other people and is a process of adversarial raw acquisition — taking property without a corresponding productive effort. Trespass might not occur immediately, but most certainly occurs through the long term through willful failure to fully disclose information. Compound interest encourages destructive competition instead of cooperative competition. When compound interest is used, does Thomas Hobbes finally win the argument that humans live in a world of all against all?

However, one can argue that trespass does indeed occur. Fraud and deceit have long been considered a form of trespass. Fraud is an act of purposely failing to provide full disclosure, a misrepresentation of the facts upon which an individual relies to enter into a contract. Arguably there is fraud when the true purpose of a circulating currency is not revealed and taught. The discovery of fraud provides standing to negate or void any previous contract. Ignorance on the part of the borrower certainly plays a critical role, but an unwillingness by bankers, politicians, and educators to reveal the facts about monetary systems is suspect.

The problem is not interest but compounded interest. The lender of capital possesses standing to contract a leasing fee to compensate for the productive loss of that capital, as well as compensate for decay and wear-and-tear. Likewise for lending currency — the token symbol representing capital. The solution is simple: replace compound interest with straightforward handling and administrative fees. Socially declare all contracts of compound interest as unconscionable and unenforceable. There is a long standing social and legal principle that the discovery of fraud provides standing to invalidate a contract. More importantly, widespread education is necessary to eliminate the existing ignorance about the global social damages of compound interest.

Leasing currency should be as linear a process as leasing physical capital. In a social system where mutual benefit prevails over political privilege, bankers arguably still would provide a community service by acting as a pivot center to coordinate exchanges. The problem is not bankers necessarily — many of whom are just as ignorant of the social effects as the masses, but the principles by which bankers operate. Even within the existing realm of operating by political permit, only straightforward administrative fees are acceptable, and some compensation for providing and coordinating a common service of issuing and circulating a common currency also is reasonable. Bankers do provide a community service by helping circulate a common medium of exchange, but should be paid in a linearly proportional manner only. Humans can produce only linearly.

The concept of compound interest is unacceptable in any society of people desiring to promote mutual survival through concepts such as of self, property, rights, contracts, and consent. Compound interest violently breaches the natural order. Compound interest is another way people try to get something for nothing, coercively redirect energy flows, and create a virtual perpetual motion machine.

Finis.

Terms of Use

Next: Chapter 6 — Monetizing Debt

Table of Contents

Bibliography

Endnotes

[1] Sumner, What Social Classes Owe, p. 72.

[2] George, Progress and Poverty, pp. 181–182.

[3] George, Progress and Poverty, p. 184

[4] Thoren and Warner, The Truth in Money Book, p. 223.

[5] Barnard, Draining the Swamp, p. 41.

[6] Walker, Francis Amasa, Money, (1878; reprint, New York: Augustus M. Kelley Publishers, 1968), p. 96; George, Progress and Poverty, p. 156.

[7] Kinley, Money, pp. 323–324.

[8] Walker, Money, pp. 94–95.

[9] Walker, Money, p. 98.

[10] Barnard, “New Equations for a Better World Economy,” www.nesara.org.

[11] George, Progress and Poverty, p. 156.

[12] The cost is $0.01 x 2(n-1), where n is the number of minutes you rent the tiller.

[13] Thoren and Warner, The Truth in Money Book, pp. 66–68.

[14] 150 percent ÷ (150 percent + 100 percent) = 60 percent; 300 percent ÷ (300 percent + 100 percent) = 75 percent.

[15] Barnard, Draining the Swamp, p. 33.