Wednesday, February 11, 2009


How to "get the banks loaning money"

Under George Bush, hundreds of billions (billions!) of dollars were doled out to the banks because we were told it was urgent to solve the "credit crunch" and get the banks loaning again. Instead, banks used the money to, among other things, buy other banks, an action which eliminates jobs. Now Obama and Geithner are about to follow with more of the same.

Really, if you don't want to have the government loan money directly (i.e., by nationalizing a bank and setting its policies according to public priorities), and you insist on using private banks, making sure that banks use the money to make loans is simplicity itself. For every billion the bank loans out, the government loans the bank the same billion. For every billion the bank spends to buy another bank or give a bonus to their executives or anything else, they get nothing.

What, too simple?

Why stop here? There's more...

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