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> A bonus feature of this implementation is it costs not much money. Big corporations have lots of assets and the government is sure to be re-paid. Says who? T
by bjourne 7y ago
> A bonus feature of this implementation is it costs not much money. Big corporations have lots of assets and the government is sure to be re-paid.
Says who? The whole point of loans is that there is a possibility that they will not be repaid. Banks thinks it is risky to lend money at the current interest rates so American taxpayers instead have to shoulder the whole burden. The assets owned by corporations is mostly in the form of financial instruments whose value is currently plummeting. The US government is taking on huge risks.
If these loans weren't risky banks themselves would issue them. Since they aren't it stands to reason that they in fact are risky!
- rorykoehler 7y agoThe fed have more options/levers to manage the situation as it evolves than banks do. I think it's less risky for the fed to do this than a major bank.
- rdtwo 7y agoThe government can offer loans where they are superior to other borrowers. This is similar to what private equity does to strip assets out from under other bond/debt holders but less evil
- bjourne 7y agoIf so, what's the point of having banks in the first place?