Marcello wrote:

Ultimately, every problem is blamed on government, especially in the ironic
instance when government fails to take on a more active role in regulating business
practices.

The laws of the United States have been thoroughly corrupted by financial
interests. So because we don't have enough government we should blame government?

The incredible level of debt per capita has been deliberately built up by the
bankers through a process of law changes backed by an expensive and pervasive b.s.
industry. Academics, news media, think tanks, advertisers, as well as politicians
have sold us out to financial interests.

Government debt, consumer debt, and mortgage debt are all ways for the finance
sector to consume an enormous proportion of production without doing anything of
real value.

Take mortgage debt. We have been taught that mortgage lenders help society by
making it possible to own your own home instead of renting. The same land and
depreciated houses are bought and sold over and over, passed from working people to
working people, who imagine they are "building equity" and investing in a
comfortable retirement. Looking at the bloc of homeowners, we should expect land
owners to come close to breaking even over a lifetime of buying and selling homes.
But look at what really happens. Of all the real goods and services transfered
to lenders as mortgage payments, only a very small fraction is consumed by
homeowners as net real estate sales profit, home equity loans, and reverse
mortgages. The vast majority, nearly all the rent made as mortgage payments are
consumed by the mortgage lenders.

We are taught in school that the function of banks in a capitalist system is to
gather together savings so they can be used to fund real capital goods like tools
used for production. In this function, banks are useful, and in proportion to
their contribution, they receive a small fraction of production. But this is
certainly not the case with mortgage lending, which requires little deposit of real
labor, yet reaps the lion's share of rents.

To illustrate the enormity of the mortgage swindle, imagine a community of
homeowners who buy and sell without bankers. They employ land contract financing,
which means "rent to own." Instead of financing a huge cash loan to buy a house,
you pay rent for thirty years. One thing is obvious from this model: No money at
all is going to lending institutions. All payments are from homeowners to
homeowners.

So how much goods and service value is consumed by mortgage lenders in the mortgage
system compared with the hypothetical land contract system?

At the end of 2006, about 51 million American homes carried a mortgage. Total
mortgage debt was about 10.4 trillion dollars. If we figure a 6.7 percent annual
interest rate on this debt that leaves an interest-only payment of 67.1 billion a
month, not including principal repayment. Minimum, that's an average of $1315.68 a
month per home that could be received and consumed by homeowners instead of by
mortgage lenders.

Mark M.