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Deposit Accounts Run On Simple Interest and Credit Cards Run On Compound Interest
Yet another reason to overthrow extreme capitalism
Schools are to all intents and purposes, political organizations disguised as places of learning.
And political organizations do not exist to do the bidding of the very poorest and most vulnerable in society; they exist to enshrine the privileges of the very few over the rest of us.
So why have I written this?
The teaching of financial literacy.
As the perceptive ones in our midst have pointed out, it goes without saying that one of the great failings of our educational system in the Anglosphere is the teaching of financial literacy to students of all backgrounds.
Financial literacy?
Knowing the basics of financial management is as much a strategic as it is a moral imperative for children from the very poorest backgrounds, who are almost certain to make the same mistakes as their parents.
And what do I mean by this?
In the third grade (or in British parlance, primary three) I learnt how to calculate simple interest rates and subsequently learnt to do compound interest rates.
But what we didn’t learn was the why.
The reasoning behind why we had to learn the difference between simple and compound interest was never taught to millions of school kids in the 1980s, 1990s, and 2000s.
And it goes without saying that Interest rates have profound consequences for billions of people around the world.
In the United States, the Federal Reserves sets the rates for the banks who lend to people and here in the United Kingdom, the Bank of England also has operational independence in setting the rates for the institutions who lend to us.
You can have a hundred pounds or dollars in your deposit account on the 1st of January 2024, safe in the knowledge that this specific amount will be worth slightly less, come the 31st of December of the very same year.
But this has never been the case for credit cards.