Executive Summary In the US there used to be limits of income that a bank could loan. This helped keep the debt load or overhead to a manageable level. Introduction The previous lending limits that were common and mandated are described in the following quotation. “What he’s suggesting, of rules for bank lending against real…
Executive Summary The term bad debt is used and the term bad loan avoided to shift the blame to the borrower versus the creditor. Introduction “The amount is going to be much greater next year and much greater the year after that because accruals of interest and it’s going to; you know, you talk about…
Executive Summary The CDO is unregulated insurance for mortgage backed securities. Introduction Credit is the change in what becomes debt in a year. When you receive a loan or a credit line, once you use it, that becomes your debt. According to Steve Keen, mainstream economists do not understand credit. This is covered in the…
Executive Summary The banking industry is filled with deceptive practices that make loans unsustainable. Introduction Private banks have a long history of creating deceptive loans that are designed to turn borrowers into debt peons. One method is to push borrowers into permanent loans. One such tactic was the bullet loan, which is described in the…
Executive Summary Private banking interests don’t want anyone to know that charging interest under a government-run banking system is optional. Introduction If the government issues its own money, it becomes “the bank.” (and any government has the ability to recapture its money creation function from private banking interests) The costs of administering a government bank…
Executive Summary Deficit hawks often propose there is some limit to government spending. The reality is for a country that creates its own money, the government spending limits are not what is generally proposed. Introduction Under Modern Monetary Theory or even better under public central banking, where the government incurs no debt when creating money,…
Executive Summary Debt ceilings are a scare tactic that supports private banking interests attempting to set arbitrary limits to the federal debt. The concept ignores the ability of governments to create money. Introduction Debt ceilings are hotly debated topics. Those individuals who do not take federal debt “seriously” are called “irresponsible” and passing on our…