[ExI] Banking, corporations, and rights (Re: Serfdom and libertarian critiques)

[BillK]

On Wed, Mar 2, 2011 at 11:45 AM, Eugen Leitl  wrote:
<snip>
> I think the real problem of interest is not interest itself, but that
> compound interest is an exponential. A linear growth model would be
> a better fit, or in any case something distinctly subexponential.
>
> The problem is that there's very good reason the compound interest
> is computed that way, and unfortunately it's not in most people's
> interest. See casino run by crooks.
>
>


Hey, don't diss compound interest!  It's the best thing since sliced bread.

Once you've made your first million, it will double in 14 years @5%
(24 years @3%).
For many years I have vainly tried to explain the compound interest
exponential to mere mortals, with little success.

Unfortunately this lack of understanding that the same exponential
applies when they borrow large sums of money means that they find
their debts increasing rather faster than they expected.


BillK