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It is unfortunate that the term has both moral character but also a precise meaning that is correct here -- excessive interest in excess of the risk premium. Th
by garmaine 8y ago
It is unfortunate that the term has both moral character but also a precise meaning that is correct here -- excessive interest in excess of the risk premium. There is unfortunately no common / non-technical word that conveys that meaning (excessive interest beyond risks).
The savings account interest rate is collected usury--as an FDIC insured deposit account the risk to the account holder is precisely zero, yet a return is nevertheless extracted. That's usury as the term was coined to mean, minus the historical moralistic baggage.
- mikeash 8y agoMy dictionary defines it as "the illegal action or practice of lending money at unreasonably high rates of interest." It gives no alternate definition. If that isn't what you meant then I think you should use a different word.
- garmaine 8y agoit Is what I meant, except for the illegal part which I believe is a bad definition here, and emphasis on the fact that “unreasonable” is up for debate. In many circles any real interest rate (meaning beyond the risk premium) is an economic rent and therefore unreasonable and correctly described as usury. Whether it is legal or not depends on the jurisdiction.
- mikeash 8y agoIf it’s not illegal then it’s not usury, sort of like how it’s not murder if it’s legal to kill that person.
- garmaine 8y agoThe term usury has religious origins predating the modern concept of law. It is a term used by law not invented for it.
- mikeash 8y agoThe meaning of a word is not guaranteed to track its origins. Communication is a two-player cooperative game with a complicated set of shared rules. If you want to win, follow those rules, don’t try to come up with better ones.
- perl4ever 8y agoCurrently I would say the interest rate of an FDIC insured deposit account is imprecisely zero. For example, one of the financial institutions I use pays 0.03%. Also, the real rate is presumably negative, in the US and I would think Europe. So usury according to your definition doesn't seem applicable.