LIBERAL DEMOCRATIC SOCIALIST
MEMDUH BAYRAKTAROĞLU EXPLAINS

OCTOBER 12, 2026
TIME: 08:00

Today I will explain one of the biggest contradictions of our economy…
And with figures…
There are approximately 20 trillion liras in time deposits in banks in Türkiye…
An average of 3 percent interest is paid on this money monthly…
What does that amount to? 600 billion liras per month!
5 trillion 400 billion liras in nine months!
Let's also add the approximately 2 trillion 200 billion liras in interest paid by the treasury during the same period.
A total of 7 trillion 600 billion liras!
This figure could be a few billions lower…
It could also be a few billions higher…
But the issue I want to discuss is not whether the figures are:

A few hundred billions lower or higher.
The issue is, who pays the price for fighting inflation in Türkiye, and who reaps the benefits?
The economic administration says:
"To reduce inflation, we must curb demand.

We must limit wage increases.

We must keep monetary policy tight."… Okay, so be it…
When a worker's salary is increased,

An inflation risk arises…
But when hundreds of thousands of liras in interest are deposited into the accounts of a few million people in the bank every month…

Why isn't the same risk discussed?
Does the money received by the worker create demand, but…

Does the money deposited into the account of the depositor not create demand? Or is the decision on whether money creates inflation or not made by looking at

whose pocket it ends up in? Now you will say:
"Paying interest is not printing money."
No sir, no… bank deposit interest…
It’s no different from printing money without backing…
Likewise, the interest paid by the treasury is nothing more than printing money without backing, due to increased liquidity…
The fact that the treasury covers its interest payments with taxes or…

New borrowing…
Doesn’t negate the fact that the next payment will also be made… without any production or…

Foreign currency or gold backing…
Therefore, every lira of interest paid is considered a new lira printed without backing…
So, my dears…
The money paid to a salary and wage earner is income, but…
Isn’t interest income also income?
Can’t a person who receives interest spend this money?
Can’t they buy real estate?
Can’t they invest in foreign currency or gold?
Moreover, when this income is reinvested in interest,
Can’t it accelerate the growth of wealth?
Of course it can!
But there is an important difference here.
Low-income earners spend almost all of their salary

On living.
High-net-worth individuals, on the other hand, can

Re-save a significant portion of their interest income or use it to increase their real estate assets or…
Foreign currency accounts.
That's why the impact of these two types of income on inflation

Doesn't have to be the same.
But their impact on income distribution is also not the same!
Now, let's turn to those who follow in Milton Friedman's footsteps…
Dear monetarist economists!
For years, you have told us that inflation is a
Monetary phenomenon.
But while you object by saying that wage increases:

Create permanent income,

Why don't we discuss enough that interest income can become a permanent income stream?
As long as high interest rates continue, depositors earn interest again.
Wage earners, however, may face the effects of high interest rate policies

Slowing down the economy. On one side, financial assets that increase income…
On the other side, millions struggling to make ends meet…
My objection is not to the existence of interest! How the cost of interest is distributed to society!
Because high interest rates, under certain conditions,

may be necessary to reduce inflation.
But being necessary doesn't mean
the cost is distributed fairly.
Let me also ask this question:
To what extent does the interest paid by the state reduce its capacity to finance productive investments and

public services?
How do the interest payments on loans to banks

affect the costs for producers? And most importantly…
While a high interest rate policy reduces inflation,

does it further worsen wealth distribution? These are the things we should really be discussing!
I'm not saying let's increase workers' wages and

distribute unlimited money.
But when it comes to the worker, it's "inflation,"

When it comes to the saver, it's "due to market conditions,"

Colorful commentary from economist and writer Memduh Bayraktaroğlu, filled with anecdotes, stories, and jokes about economics, politics, and life...

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