imo the government should get options related to the assets they are gonna guarantee. i don't think companies should get a free lunch especially when they're able to buy a high quality name at bargain basement prices with their tushies covered in the transaction.
""Bush yesterday said he won't be stampeded into ``bad policy decisions'' that might harm the economy."" Well that's reassuring Georgie
Yes, a full reserve system. Remove the banks' ability to create additional money out of thin air. Banks would be in the business of taking deposits, loaning them out, and earning the spread. As opposed to creating money out of thin air, leveraging up to absurd levels, and jeapordizing customer deposits with a glorified pyramid scheme as a result.
That works great in a medieval agrarian economy with infintesimal economic growth. But that makes it practically impossible to have any sort of industrial technology, let alone computers. Economic growth would be completely hobbled by lack of money and credit.
Pabst, these guys just don't get the magnitude of what has been going on in the banking sector. Can you imagine what would have happened to Bear ( and others ) had the FED stood by and done absolutely nothing in order to "support" the dollar like these Neanderthals wanted months ago? Can you imagine where the Economy would be right now if the FED just sat there doing nothing going back to last Fall?
could you also say that in a mature economy with a naturally slowing rate of growth, fractional reserve lending results in malinvestment and wealth concentration, rather than real sustainable economic growth?
Exactly. But these guys ( Cutten, Detective, Aaron Copland, S2007S ) don't seem to understand that as a nation, the United States has a horrible savings rate. It was actually NEGATIVE for the entire year of 2005. As a result, there is no capital formation generated for credit creation and economic expansion. That's why we have the FED. If our nation actually had a decent SAVINGS RATE, the FED wouldn't have to make up such a large part of the economic stimulus! But there is no SAVINGS RATE. Instead, we have a government that spends, spends, spends like a drunken sailor on shore leave. Thanks Bush & Cheney! You idiots. It's that simple.