Bailout Suggestions to Hanky Bernanke from a Banker

[patientrenter]

Thanks, Dave and others, for an intelligent conversation about the issue. I have one point to add: I think we should be moving as a country away from encouraging more investment in residential real estate. No more buyer incentive programs, no more deductibility of mortgage interest, no more govt guarantees for mortgage loans….

After a few years of shock, we will have an economy that is more productive, sustainable, and competitive. Any more gradual plan is, I’ve concluded, the alcholics plea for “just one more drink”.

[CA renter]

Thanks for your response, Dave, and we agree that the best scenario would be a few years (3-5?) of severe recession/depression with slow growth thereafter for a number of years.

Personally, as far as fractional reserve banking goes, I’d like to see 100% reserve banking or, at most, 2:1 loaned out (two dollars loaned for every one dollar in deposits).

Shrinkage? Yep.

High interest rates? You betcha!

Lots of pain as we adjust through the credit collapse and begin saving toward future purchases? Tons of pain, but well worth it over the long run, IMHO.

Healthier economy where people can save and actually buy things with their own money…priceless!!! 🙂

[CA renter]

Thanks for your response, Dave, and we agree that the best scenario would be a few years (3-5?) of severe recession/depression with slow growth thereafter for a number of years.

Personally, as far as fractional reserve banking goes, I’d like to see 100% reserve banking or, at most, 2:1 loaned out (two dollars loaned for every one dollar in deposits).

Shrinkage? Yep.

High interest rates? You betcha!

Lots of pain as we adjust through the credit collapse and begin saving toward future purchases? Tons of pain, but well worth it over the long run, IMHO.

Healthier economy where people can save and actually buy things with their own money…priceless!!! 🙂

[CA renter]

Thanks for your response, Dave, and we agree that the best scenario would be a few years (3-5?) of severe recession/depression with slow growth thereafter for a number of years.

Personally, as far as fractional reserve banking goes, I’d like to see 100% reserve banking or, at most, 2:1 loaned out (two dollars loaned for every one dollar in deposits).

Shrinkage? Yep.

High interest rates? You betcha!

Lots of pain as we adjust through the credit collapse and begin saving toward future purchases? Tons of pain, but well worth it over the long run, IMHO.

Healthier economy where people can save and actually buy things with their own money…priceless!!! 🙂

[CA renter]

Thanks for your response, Dave, and we agree that the best scenario would be a few years (3-5?) of severe recession/depression with slow growth thereafter for a number of years.

Personally, as far as fractional reserve banking goes, I’d like to see 100% reserve banking or, at most, 2:1 loaned out (two dollars loaned for every one dollar in deposits).

Shrinkage? Yep.

High interest rates? You betcha!

Lots of pain as we adjust through the credit collapse and begin saving toward future purchases? Tons of pain, but well worth it over the long run, IMHO.

Healthier economy where people can save and actually buy things with their own money…priceless!!! 🙂

[CA renter]

Thanks for your response, Dave, and we agree that the best scenario would be a few years (3-5?) of severe recession/depression with slow growth thereafter for a number of years.

Personally, as far as fractional reserve banking goes, I’d like to see 100% reserve banking or, at most, 2:1 loaned out (two dollars loaned for every one dollar in deposits).

Shrinkage? Yep.

High interest rates? You betcha!

Lots of pain as we adjust through the credit collapse and begin saving toward future purchases? Tons of pain, but well worth it over the long run, IMHO.

Healthier economy where people can save and actually buy things with their own money…priceless!!! 🙂

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