wrote in message
...
On Aug 11, 10:34 pm, "PrecisionmachinisT"
wrote:


Exonomic growth ( wealth creation ) absolutely depends upon the continued
issuance of debt via the fractional reserve system ----( something I've
been trying to get you to understand for some time )

Maybe if you explain why economic growth depends on continued issuance
of debt , I might be convinced.

The current political situation is similar to having the bank
president
(
Boehner et al ) instruct it's loan officers to turn down loan apps for
new
refrigerators and washing machines from anyone who lives on an
even-numbered-street even though they might make 180K per year and
have
no
other creditors to speak of.
More like the having the bank president instruct it's load officers to
turn down loan apps where it looks like the loan will never be paid
off.

What in the world makes you think that a bank officer would EVER want a
loan
to be fully paid off ?

If it looks as if a loan will not be paid off, it generally means the
property will go into foreclosure.

Something that should have been done in the mortgage business.

Why ?

If the bankers had required that borrowers are capable of paying on
the loan until it is paid off, there is much less chance of having to
foreclose. The loose loan requirements was one factor in creating the
housing bubble and the recession.

--a banker's interest lies solely in maintaining a positive income stream.

It is not positive if the loan goes into foreclosure. Why do you
think the banks had to be bailed out by the government?

Dan

Banks were playing with other peoples money, and consequently less concerned
about whether it got paid back.

Mortgages, and even the market value of the properties themselves, ceased to
be driven by supply and demand for housing and were instead driven by the
supply and demand for mortgage backed securities.

Because this process kept driving up property values, no one was much
worried about foreclosures. Prepayment of the loan was viewed as a bigger
problem than default. When people prepay, the investors lose their income.

The junk mortgages were not invented to give deadbeats a loan, they were
invented to create more mortgages to sell to investors.

Paul K. Dickman