[quote=sdduuuude][quote=CA renter][quote=sdduuuude]Yes, we should make it illegal for anyone to loan anyone else any money unless it is the government doing the loaning or borrowing. That’ll fix everything. Brilliant[/quote]
You’re missing the point.
[/quote]
No. I’m entirely on the point.
The original poster stated “we should remove private banks.”
What is a bank? It is a private entity that borrows money from depositors and loans it to borrowers.
By definition “removing private banks” basically makes it illegal for people to borrow from each other. It seems a basic right to me and not really the source of the problem.
What we need to remove is the fractional reserve system, a debt rating system that pays based on volume rather than quality, and the bailouts that make the problems of stupid banks everyone’s problem.
Banks should not be removed by anything other than their own ineptitude.[/quote]
1. We agree regarding fractional reserve lending, the ratings agencies/system, and the bailouts. (see, that was easy 😉 )
2. Banks are totally unnecessary if people want to make loans to one another. I can make a loan to you, or vice-versa, and we would never need the services of the bank for this loan.
Companies can issue bonds, and mortgage lenders can be individuals or institutions that are totally unlike a traditional bank.
We have wrongly elevated banks/financial institutions to such levels that capital now plays a much more important role than labor and productive work. IMHO, this positions us for problems like the ones we have today.
I’m not opposed to banks, per se, nor am I opposed to some kind of govt insurance like FDIC for deposits. However, we need to limit the financial industry’s power over the rest of society.
Put the lenders and the borrowers directly in touch with one another. Let them personally evaluate the risks they want to take, and what the price of their own money should be. No leverage, no middle-men, no govt bailouts if it fails.
