It’s not about the Banks

The banks are not going to lend. Who can they lend to? Frivolous lending is how we got into this in the first place. But as the saying goes, the way you start a thing is the way you will finish it. So at this point, I believe if the leader in this country really want to fix what is going on is to go straight to the tax payer and give them back their money, the tax payer’s dollars, so they can put it back into circulation to get the economy flowing.

I don’t know about anyone else, but how does this sound: the tax payer’s dollars are given to the banks and they lend that money, the tax payer’s money, back to the tax payer with interest. And the banks then make a profit off of the tax payer’s hard earned money while you the tax payer struggle to pay back the money you gave to the bank in the first place with the meager wage you are paid. Think about it.

It is so amazing how you hear these economic advisers and pundits go on these TV shows go on and on about “the tax payer’s dollar” and being accountable for “the tax payer’s dollar”. Cut the bull. What does it look like for the tax payer to borrow his own hard earned money which a percentage goes toward paying taxes,( and I do not mind paying taxes to help shore up our infrastructure, help the elderly, disabled, etc., etc.) and then the government takes that hard earned tax dollar and use it for purposes not intended, and that is give it to the banks.

The banks, if the government has it way, would lend you your hard earned tax dollars, with interest mind you, and they make a profit while you are struggling to pay back the loan and are left holding the bag. But the banks are still not lending because they are trying to cover themselves at the expense of the tax payer. They are using the tax payers money to cover their obligations for those credit default swaps.

I refuse to borrow because it would only be the banks making a profit and they are making their money the easy way they are not really working for it. They should earn profits from the tax payer instead of just getting free tax payer money. Tax payer dollars should go back to the source, the tax payer so the money can be spent at some local or national businesses. As a result of this spending, commerce would increase and business can hire more people. And in turn those new hires earn money and that money is spent at local and national businesses and so on and so forth. Those businesses in turn can take their earnings and make deposits giving banks the cash capital they need to lend out or do whatever else they need to do. The banks should not be getting fresh batches of printed money.

The banks would have to experience some pain because in the meantime, the banks would probably have to wait a period of time until the economic wheels start rolling again to see their coffers increase. During that waiting period some banks my fail others may not but I would suppose that would be the natural order of things. That would be the real stress test, the survival of the fitness test. It is not a stress test going through the banks books and seeing how sound they are according to the assets or how well capitalized they are. The banks already know how they stand and do not really need anyone to tell them. Their soundness should be determined by the number of assets that can go from being bad to being a good. And the way an asset can go from being bad to being good is to change the whole economic dynamic.

Give the tax payer their own money so the consumption can pick up. The tax payer can turn the bad assets bank into good assets because they would have the money available to make payments on outstanding debts and bring them current so the assets can be brought back into good standing. And as a side note, a decent wage would not hurt but would be very helpful in making sure those assets are good and valuable.

This one track mind of thinking that lending is the key to get the economy going is old and washed up as well as mind boggling seeing that is how we got to where we are now. And besides, the banks are not going to lend for two reasons in my opinion. One, they are trying to shore themselves up and two, the lack of credit worthiness on the part of the consumer. Hmmm, now I wonder how that happened.

This is why the economic engine has stopped and it will not start without the consumer doing their 70% part of the macro equation. And let’s face it, the honchos on Wall Street made their millions the easy way. It was an easy flow of money into their hands and now it is the tax payer’s turn. Joe and Jane Consumer want the same easy money Mr. Bill Wallstreet was able to get, and if easy money started at the top, it will fall to the bottom. It is time for the wall street people to sit on the side lines and wait for Joe and Jane Consumer to enter the market and spend so businesses can earn solid, consistent profits from the bottom up, instead of printing fresh batches of money which is degrading the value of the dollar and creating potential future economic problems as well as National Security problems.