In The "Interest" Of The Wealthy

Something often lost on many Americans is the fact that huge amounts of payments from "interest" flows into the accounts of the wealthiest Americans. This is "almost always" a transfer of wealth, in that the borrower likely wouldn't need the loan, if they had sufficient resources to fund their needs. Credit is something that's been around from ancient times, but as the wealthy saw they didn't really have to do physical labor, they let their money do the work for them. I won't necessarily beat up on them for this idea, because most, or all, of us would do the same if we could. The thing is, as the conservatives like to say about welfare, it becomes a way of life, and a way of life far detached from the lives of "payers of interest." Just as with dish detergents, televisions, cars, casinos, just name it, the people collecting interest have to convince you to "buy their product/service."

During the 1980s, President Ronald Reagan claimed to be a conservative. He told people how his predecessor, Jimmy Carter, had just let government deficits run amok.* Reagan dramatically cut taxes, dramatically increased military spending, yet he told us his program wouldn't cause deficits and that it would pay for itself. Such nonsense was pointed out by his 1980 nomination opponent, George Bush, Sr., when he called Reagan's program "voodoo economics." Of course, as is often the case in politics, including with Democrats, that didn't stop Bush from accepting Reagan's offer to be his vice presidential running mate, and then vice president. Carter's deficits, which include the budgets of 1978, 1979, 1980, and 1981, totaled a bit more than 250 billion.** Reagan's deficits, which include the budgets of 1982, 1983, 1984, and 1985, totaled more than 730 billion. 

The above mentioned deficits were financed by borrowing. Borrowing form whom? Mainly from the wealthy segment of America's population who bought government bonds, to which billions were paid in interest by taxpayers, many of whom were middle and working class Americans. So Reagan's program cut taxes tremendously for the wealthy, then ran deficits, then paid the wealthy large interest sums on those deficits, funded to a great extent by less than wealthy taxpayers. That's called "transfer of wealth," folks. 

Further, just to point this out, interest from all sorts of loans, like from homes, cars, and credit cards goes mainly to very wealthy people, often directly in the form of compensation to CEOs and other high corporate officials, but also in the form of dividends and higher stock prices, since a large percentage of stocks are owned by ..... the wealthiest Americans. After tax cuts for the wealthy, income taxes were finally raised on the wealthy by Bill Clinton and Democrats in 1993. No Republicans voted for the increase, and in fact, Republicans assured Americans the end of the world was near because of such increases, a scenario that played out only in their imaginations, as the economy actually boomed. So let's just take an "accounting," if you'll pardon the expression: Reagan said he could cut taxes big time, increase military spending big time, and that these actions would not cause deficits. Turned out NOT to be true. In 1993 Republicans were adamant that Democratic tax increases on the wealthy would bring doom to America. That too turned out NOT to be true.

* Democrats shouldn't crow about Reagan's inconsistency, as Democrat Franklin Roosevelt attacked Herbert Hoover for deficits in the 1932 election. Once in office, FDR's administration ran far bigger deficits than Hoover. Interestingly, FDR was long a hero of one Ronald Reagan, who was a Democrat for quite some time, and Reagan frequently quoted Roosevelt in speeches. I point out the discrepancies in Roosevelt's and Reagan's campaign admonishments of their opponents and then their own far larger subsequent deficits, not to argue about the effectiveness or ineffectiveness of deficit spending, but simply to show their rhetoric compared to the reality of what they did in office. 

** Just a note, I calculated the deficits under both Carter and Reagan from their second year in office (1978 for Carter; 1982 for Reagan), as their predecessors actually presented the budget for the first year of their term. Of course, this means that each president's budget extends, by one year, into the next presidential term, which for Reagan was his own second term (1985).

WORD HISTORY:
Hire-The ultimate origins of "hire" are uncertain, and for a fairly common word, it's history is sketchy, but it "seems" to go back to a West Germanic (see note below) form "hyurja," which "seems" to have had to do with pay/compensation for men working on ships, but it then became more general in meaning, "to pay for any type of work." Whether the word was a West Germanic invention or whether it was borrowed from another unidentified language, perhaps no longer in existence, is unknown, but it's seeming connection to men working on ships gives that some credibility, as words could easily be picked up from more distant places that way. "Apparently" the Anglo-Saxon dialects (before they went to Britain to combine into English) and the dialects that became Low German, Dutch and Frisian had forms of the word, which then spread to other Germanic languages. All of these West Germanic dialects/languages were geographically close together back then along the North Sea coast, where seafaring was a way of life. Anyway, the West Germanic form gave Old English (Anglo-Saxon) "hyr," a noun meaning "a payment for a service," and "hyrian," a verb form meaning "to pay for service or work." Both later became "hire," with the same general meanings, although the verb form used reflexively "means to hire oneself out for work/employ." The noun and verb forms are also used in England and Britain, in general, where Americans would use "rent;" as in America we are more likely to say, "I rented a car," whereas in England they are more likely to say "I hired a car." The other Germanic languages also often use their forms to mean "to rent, to lease," and as a noun meaning "rental contract or agreement." Similar to above, it sounds a bit odd to Americans to hear, "I have many workers in my hire," since we now more typically say "in my employ," or just "employed." Standard German has "Heuer" (noun, properly pronounced as if "hoyer," but in some dialects it can sound pretty much like the English pronunciation), and "heuern" (uncommonly used verb), but these were borrowed from Low German, which has "Hüür" (noun) and "hüren" (verb). Dutch has "huren" (verb) and "huur" (noun). West Frisian has "hier" (noun) and "hiere" (verb). Danish has "hyre" (both noun and verb form), but borrowed from Low German or Frisian; Swedish "hyra," perhaps then borrowed from Danish. Not sure, but neither Norwegian nor Icelandic seem to have picked up a form of the word; at least I could not find one.   

NOTE: Indo European was an ancient language. Its speakers did NOT call themselves, nor their language, Indo European, as that is simply a more modern classification term used in the study of languages. One of Indo European's offspring was Germanic. Germanic divided into what linguists classify as three parts, East, West, and North, although the last of East Germanic died out a few centuries ago. English is Germanic, and even more specifically West Germanic, along with its closest relatives Frisian, Low German, German, Dutch, and Yiddish. I'm planning to do an article on Yiddish.