Why not liquidate all banks, GOVT opens up the FED to the public?

Discussion in 'Economics' started by KINGOFSHORTS, Feb 23, 2009.

  1. Let the public directly borrow from the discount window instead?

    Convert the branches to Federal Reserve Branches, ATMS etc..

    Take the middle man out of the equation which means less slippage,friction,overhead,Bonuses etc..

    Grandfather all existing mortgages to 2%

    No worries about a credit freeze etc..

    We should just get this over with and move on.

    I guarantee the economy will pick up.
  2. Well, gee....

    Because if the government is the only bank then it has a monopoly and monopolies tend to lead to higher prices for consumers.

    If new mortgages can't be had for 2%, then the price of the houses still has to be adjusted downward as their will be fewer bidders as the price of mortgages increases.

    I'd go on, but you post is too economically ignorant to cover in one go.
  3. Well last I heard, they want housing prices back up so that homeowners can take more equity loans to fund the economy.

    I never said new mortgages cannot be had for 2% only that existing holders get the same breaks.

    Getting rid of the banks will make money cheaper since there is less overhead and hoarding. Since the government plans of spending trillions to nationalize the losses while letting the gains be private. Might as well do right by taxpayers and just cut out the middle.
  4. lrm21


    We are already there by proxy. Actually, the government should not be in the loan business. No where in the constitution did I read an amendment on guaranteed loans for every individual who needs them.

    Capital is property and property belongs to the individual (corporate or person) or so it used to be. The problems we have today are precisely the result of the government forcing individuals to allocate their property in counter productive ways

    - allocation of property via taxation to individuals who none or incapable of creating more.
    - allocation of capital via loans to high risk individuals with low risk premiums, via the indirect guarntee of the government (taxpayer)

    The harder the state tries to reallocate capital from the producers to the consumers, the larger the disaster will be economically. One only need to take this mental exercise to the extreme of communism. It failed period.
  5. I agree. We are not a true capitalistic economy. A lot of people blame free market but the truth is we created a Moral hazard a long time ago. All these banks figured out way back when that they would always be to big to fail.

    Look at LTCM, If we would have let them failed the problems would never reach the magnitudes they did today. Bailing them out opened up a can of Moral hazard.

    Might as well stop the BS and just get it over with.
  6. lrm21


    Yep you can bet greenpan et al, will go to his grave with nightmares of LTCM.

    If we are going to get anything over with it should be the current government structure. From the Federal reserve, to term limits for senators to the IRS, Department of Energy, Interior, Agriculture, ATF, Education, Energy, etc.

    I suppose a shadow government is in the making in the next few years, not unlike the French Revolution but with a focus on the individual and not the state.
  7. solution get rid of fed

    treasury lends money

    taxes are replaced by interest Treasury gets

    too much money interest raised to tighten money

    too little reverse

    no taxes, no fed manipulation.

    oh and complete transparency, so we know who to kick out off office
  8. no where in the const. does it give the power to create money to the banks
    fed and banks are unconst.
  9. Since the fed can print arbitrary money failure isn't an option.
  10. We used to have greenbacks.

    There is no need for the FED. The US could directly issue bonds and print money. Unfortunately the masses think the FED is the US govt.
    #10     Feb 24, 2009