Why are U.S. middle-class incomes falling? Why do the rich get richer and the poor get poorer? Simple! Because the poor get tricked into giving their money to the rich! How? Through long-term and usurious interest rates. Actually, one reason why the middle class is shrinking is because twice as many people – the smarter ones – are moving up into the upper-class than the foolish ones who are moving down into poverty: see the article "Yes, the US middle class is shrinking, but it's because Americans are moving up." How can you become one of these smarter people?
In Proverbs 22:7 we read - "The rich rule over the poor. The borrower is a slave to the lender." And verse 22 states - "Do not exploit the poor, because he is poor; and do not crush the needy in court." By taking out long-term or high-interest loans, you are in effect selling yourself into slavery to the lenders: they own you. They rule over you. To them, the Golden Rule is "He who has the gold makes the rules."
The rich know how to exploit the desires of the poor to have things they can't actually afford at present: sell to them on high-interest credit! In fact, it's gotten to the point these days that they will even "pay you" to borrow money from them: they will offer a 2% or 3% or even 5% discount off the purchase price if you put it on a credit card, taking out a loan. Why? Because every dollar of a loan creates "fiat money" out of thin air and the lenders more than make up that discount by getting some of the newly-created "fiat money" and from the high interest rates they charge.
The rich understand what most poor people don't: get our PDF "The Magic of Compound Interest". When signing a 30-year mortgage at a so-called "6% compound interest rate," most people don't realize that in the first year their effective interest is 500%, and in the first six years their effective interest is 400% and you've only paid off 10% of the loan. That means in the first six years of that 30-year loan, you've maybe paid for the front door and porch: the bankers and investors get most of your money up front.
But the Lord commanded Israel to lend money for no longer than 6 years: "In the seventh year you must cancel the debts of those who owe you money" (Deuteronomy 15:1). On a 6-year loan at 6% compounded, only 19% of your total payments is interest and you've paid off 100% of the loan! This would require higher monthly payments, so the solution is to start small – borrow less, and pay it off in 6 years, resulting in a much lower percentage of the total amount paid is interest and a much lower total amount is paid. People may say, "Toward the end of a 30-year mortgage, you're paying with cheaper dollars so it costs you less." True, but it also means at the beginning of your mortgage, you're paying the bankers and investors huge amounts of interest with dollars worth more! At Agape Restoration Society, we educate the poor about how to build up equity quickly without paying a huge amount of interest.
Another way that bankers and their investors get huge amounts of your money is by student loans and credit card debt. It seems so easy to take out a student loan... and another... and another... until you're thirty- or fifty- or eighty-thousand dollars in debt for your B.A. degree. Or you "need" new furniture for your new apartment or new house, so you "put it on the credit card"... at 18% or 22% interest. Then you get behind on your payments and are assessed costly penalties. All these types of credit allow the government through the banking system to create "fiat money" out of thin air, making the rich richer and you poorer, adding to inflation and driving down your real income.
So the third way the rich get richer is by "surfing the waves" of inflation. They understand that when the government creates "fiat money" it causes prices to rise because money simply represents the actual goods and services being produced. For example, in an imaginary country of 100 households in which each earns $1,000 a year, the economy is worth $100,000. Then this country has an economic crisis, so it sends each household a "stimulus" check for $500. Presto! Now the economy is worth $150,000! The simple people are happy to go out and spend this "free money" but the smarter people buy shares in broad-based index funds that spread their investments over many companies. Now prices start rising because the economy is still producing the same amount of stuff but the number of dollars is 50% greater. The smarter people's share of the economy is now worth 50% more dollars than before so they don't care that everything costs 50% more: they own shares in the companies that produce this imaginary wealth.
Meanwhile, the simple people are living from paycheck to paycheck, they complain that everything costs more, and any dollars they might have in the bank are worth less and less. Then they demand that the government "tax the rich!" but the smarter ones understand that the companies treat taxes as a cost of doing business, so they raise their prices to cover these taxes. This passes the cost on to the consumers: "fiat money" is a hidden tax on the poor. Which are you, the simple or the smart ones? So enroll in our free courses to see how YOU can do diakonia-ministry to the "poor, maimed, lame and blind". And Join "The ARC" Chat/Video Forum to Build the ARC!
Why are U.S. middle-class incomes falling? Why do the rich get richer and the poor get poorer? Simple! Because the poor get tricked into giving their money to the rich! How? Through long-term and usurious interest rates. Actually, one reason why the middle class is shrinking is because twice as many people – the smarter ones – are moving up into the upper-class than the foolish ones who are moving down into poverty: see the article "Yes, the US middle class is shrinking, but it's because Americans are moving up." How can you become one of these smarter people?