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Originally Posted by i2kdave
The cable is preventing the rear lever from springing back all the way, so it's like the brakes are really close to being engaged at all times. Maybe this is how it's supposed to be, but it just seems like the brakes should "open up" more than they do when the pedal is released.
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I suspected as much. What you described is exactly the way it is supposed to work.
The point where the cable attaches to the lever is an adjustment point; the funky nut on the threaded bolt. If you loosen that nut enough, the lever will spring back all the way......or close to it, and the back brake will not work at all because the "throw" on the pedal will be so long that your foot can't move it far enough.
There is a little more to it but the basic method to adjust the rear brake is to tighten that nut until the brake just starts to drag and then back the nut off 1/2 or 1 turn until it just barely releases. That needs to be done with the rear wheel OFF the ground so it turns freely. The rear brake is pretty weak to start with; adjusting it too loose makes that even worse.