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To answer the above replies, I consider myself an Economic Atheist - the "science" of econmics is no different than religion in my mind - something I don't believe in. So yes, not only do I not understand economics, I don't believe in it. It's just a bunch of rich old men that sit around justifying a few super-rich in a sea of poor, plain and simple.
So, speaking of old men, I'm thinking the Pilgrims may have something in common with your thought - work vs. eat - as I recall. I don't know, but there's a trade-off someplace..... that's the part you're missing.
The ancient civilizations had economists. They did graphs, etc, just like we do today.
We need not assume that interest rates were “economic” in the sense of being within the ability of most cultivators to pay. Abject need was the motive for agrarian debt. A key financial dynamic of ancient civilizations was precisely the problem of debt arrears (including unpaid tax collections) mounting up beyond the ability of many borrowers to pay. This is what led to the royal amargi, andurarum and misharum “Clean Slate” proclamations of Mesopotamia during 2400-1700 BC, cancelling agrarian debts (but not commercial obligations, that is, the placement of money with tamkaru-merchants to finance their trade ventures).
It would have been more prudent of governments to have wiped out the negative equity of the victims of the recent crash than pour trillions into the banks (the culprits) to continue what they were doing - engaging in incompetence and greed.
In the UK, it would have been cheaper to make every man, woman and child a millionaire than to have bailed out incompetent and greedy banks.
If all loans come from the government, who decides who gets to borrow how much? Do Democrats get bigger mortgages, and therefore bigger houses, than Republicans? What if you get a mortgage, become unemployed, and stop making payments? Will the government foreclose on you, like a greedy bank? Will there be any renters, or will everyone be homeowners? What if you want a business loan, to start a new business, to invent something, make thousands of them, and sell them? And someone else wants the same loan, but the thing they're inventing is less likely to be successful? Will the government decide which gets the loan, based on a bureaucrat's opinion of which invention is most likely to be successful? What if the bureaucrat doesn't understand the technology behind the invention? What if they use an expert witness, but that person runs a company that makes a competing invention? How is the bureaucrat supposed to know that? If he doesn't understand the invention, and needs an expert, how is he going to understand the conflicts of interest, etc.?
The reason why we can't trust the government to manage too much of our society is simply because they don't have what it takes. They consist of politicians and bureaucrats. When you let politicians and bureaucrats run things, you get mismanagement and disasters. Just like if you let kindergartners run things.
Of course letting bankers run things might be even worse. But the point is that letting the government run things does not solve the problem. You need to come up with a better solution than that.
If all loans come from the government, who decides who gets to borrow how much?
The same as now. The bank will be commonly owned.
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The reason why we can't trust the government to manage too much of our society is simply because they don't have what it takes.
Well, trusting the private sector has resulted in two world-wide crashes in about 80 years and countless boom and busts. The so called free-market has not provided affordable homes for sure.
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When you let politicians and bureaucrats run things, you get mismanagement and disasters.
See above
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Of course letting bankers run things might be even worse. But the point is that letting the government run things does not solve the problem.
Much of the problem is solved by reclaiming commonly created wealth to pay for common services, preventing it being appropriated by private individuals and organizations. That is why we have the trickle up effect with most wealth in the hands of a few.
The concept of Money is a very high-order abstraction and therefore is difficult for most people to comprehend, except in the ordinary experience of "working for a living" and "buying stuff".
There is no way to factor in the TIME value of money without "interest" in some form or another.
To disregard the time value would be to allow someone to borrow money FOREVER.
Today, we call this THEFT.
OP... will YOU "lend" someone money forever?
Let's just raze every building out there and build dorm-style high-rises.
Everyone gets one room.
Everyone gets two changes of clothes and some clogs.
No one gets anything else.
You fail to understand a basic economic principle: resources are not unlimited. Because of this, the phenomenon of cost can never be escaped. Every decision I make involves some type of cost. It would be nice if we could distribute income in the form of interest-free loans, but doing so would come at the cost of someone or something. You have to understand that the interest rate acts a pricing signal. It says that I am willing and able to give up a certain amount of resources because the opportunity cost of selling them to you at such a price is less than or equal to the benefit of trade. If I give them to you for free -- or give them to the government to give to you -- then I will not even be producing a normal profit (the point at which I am receiving just enough benefit to cover all of my opportunity and explicit costs).
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I don't know, but there's a trade-off someplace..... that's the part you're missing. 
