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How do you think banks work? Somebody who works for a living and earns money (a producer) goes and puts their money in a bank along with many other producers. The bank then lends producers' money out to people looking for a loan under the assumption that not everyone keeping their money in the bank will want all of it at once. The people that get the loans can be considered non-producers. Maybe they want the loan to start up a business. They haven't done anything yet and they need other people's money in order to get started. They get the loan, start up their business, make money and pay back the bank plus interest. That's how banks make money. Think about it, the bank puts more money in your account every month just for keeping your money there. Where do you think that extra money comes from?
The place the "multiplier effect" benefits come from.
paper gains can very well be realized, by borrowing against them..
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Originally Posted by Hoonose
We have a winner here!
Actually it fell flat on its face
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Originally Posted by montycench
They're expected to pay the bank back but if their business fails then they have no money to pay the bank back and that money is lost. Banks take a risk when they loan out money. Sure the bank can go after that person legally and a court can order the person to pay the money back but at the end of the day if that person doesn't physically have the money then there is no way for the bank to make that money reappear out of thin air.
But if their business fails, you're still going to get your return as a depositor. To equate a potential business owners success or failure to someone receiving food stamps stimulating, is rather silly.
When was the last time a food stamp recipient hired you full time to build, repair, produce, invent, or improve something?
I build, repair or improve nothing without a consumer.
Invention is something else. Inventions create their own new consumers, if successful.
Please take note that in the summer of 1973 I received $44 of Food Stamps for $33 per month for 3 months. My medical group did about $25M a year in business until we sold it a few years ago. And at one time we were the 3rd largest employer in our town.
You should take an econ class or 6 lest someone mistake you for a commoner.
I are a commoner.
I is not a kalleej stewdunt. At least not anymore.
One of the things I learned in life, after having become a 'true authority' about a few things with the papers to hang on the wall to prove it... Was that they're not infallible.
That money needs to be BORROWED in order to pay the bills of the food stamp program. it might still run a deficit, but it would borrow a hell of a lot less than they currently do..
A hell of a lot less? The food stamp program runs about $80 billion a year. The deficit last year was around $1 trillion. Meanwhile, Medicare ran around 10X the food stamp program and relies on government transfers to operate.
On balance QE's have been successful but not dramatically so except for the rich, borrowers and for home buyers. But QE has not been measurably good as a jobs booster. QE has essentially robbed the private sector of significant interest income.
No one will ever specifically pay back for any Food Stamps distributed. Federal taxes today and tomorrow will not be altered because of Food Stamps. Politics is what determines taxes in any monetarily sovereign system, not conventional accounting. If we were a US state or Greece, there would be conventional accounting.
A hell of a lot less? The food stamp program runs about $80 billion a year. The deficit last year was around $1 trillion. Meanwhile, Medicare ran around 10X the food stamp program and relies on government transfers to operate.
Everybody seems to have amnesia around here when it comes to Medicare spending. Kind of like they never heard the word Medicare. Maybe they should look in the wallets?
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