No interest economy , would it work ?

[aerius]

In theory it's possible under some fairly specific conditions:
1) The State which is doing the lending is running a budget surplus so that it can afford to lose money on loans
2) The overall economic environment is either stable or deflationary, otherwise the lender runs out of money really freakin' fast*
3) Anyone taking out a loan from the State gets heavily scrutinized to ensure they have the means of actually paying off the loan

In the real world, forget about it. There's no country I know of that's running a budget surplus along with having deflation or zero inflation, and certainly not for any extended length of time.


* There's something like $20 trillion in mortgages alone in the US, just a couple percent of inflation will blow a $400 billion hole in the budget every year.

 

[Bagatur]

because not all that borrow return the money. an institution which charges no interest would go bankrupt immediately.