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Should taxpayers support banks, children?
Hell no.
OK. Then we abolish all support for banks. But
that means depositors lose money when a bank
fails. What do we do about that?
E r. Dunno.
Well it’s easy: set up state backed accounts or
banks for depositors who want total safety, but
they’d get li(cid:11)le or no interest. That money is not
put at risk. As to those who want their money
loaned on so they can earn more interest, they
carry the risk (just like anyone who invests on
the stock market carries the risk). Why should
anyone else bear the risk?
Good idea. We love you Miss.
No: the state would just create
Mi ss,
there’d be new money and spend it (or cut
l ess l end- taxes) which would mean every-
i ng, so GD P one has more money. So total
w o ul d f a ll. spending would return to it’s
original level. Loan based
spending would fall and non-loan
based spending would rise, plus
debts would fall.
No it’s higher because you’ve
s
P i
D removed a subsidy. GDP is
o G
S
a c k maximised when prices are at
b
t
h e re i free market prices rather than
w
te d .
s t ar subsidised prices.
But less
True, but mortgagors in the 1980s paid
money
THREE TIMES the interest rates they
available
pay nowadays. Did the sky fall in the
for loans
80s? Anyway, the fact that my idea
would
raises GDP trumps all other points: if
mean
anyone is really badly hit they can be
higher
compensated out of the increased GDP.
interest
To use technical jargon, my idea is
rates.
Pareto op(cid:22)mum. It’s game set and
match to me.
all
n t’
h a ve
hy
S o w o fe ss ors Cos they aren’t as smart
pr
h ose
t mics as you and me, children.
o n o
o f e c o ne
h at
d t
ork e
w
o ut?
I was inspired to create this cartoon by Giacomo Corsini.
Any mistakes are my responsibility - Ralph Musgrave.