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Politics : Formerly About Advanced Micro Devices
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To: TimF who wrote (208075)10/21/2004 11:34:41 PM
From: tejek  Read Replies (1) of 1574559
 
Most usury laws do help the poor.

That's debatable. One of the effect of such laws (and any laws that set limits on price, in this case an interest rate is the price on borrowing money) is to limit supply.

That may be true in practice but I would rather have a decent supply of loans at 12% than an unlimited supply at 30%.

That fact, however, does not change my original point. Certain laws were put into place because the rich were gouging/taking advantage of the poor.

Generally restrictions on price are cures that do more harm then the disease.

That would be true......however usury laws are fairly generous and most lending institutions are able to make a good return on their money.

Laws directly against price gouging can often do more harm then good. If supply suddenly goes down or demand suddenly goes up and you don't let prices shift then you have rationing by que or by connections instead of rationing by price. Also you lose the inventive for supply to increase or for demand to decrease that would come with higher prices.

I understand the delicate balance between supply and demand and how gov't legislation can screw it up. However, when the private sector gets out of hand and begins to gouge its clients esp. its poor ones, then gov't needs to step in. If the gov't legislation is reasonable, the balance does not have to negatively effected.

ted
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