We need to eliminate banks

https://www.npr.org/2020/04/22/840678984/small-business-rescue-earned-ba...

So we provide emergency government-backed loans to small businesses in the midst of this crisis, and the banking industry gets a 3% cut without even taking on any risk?

Sounds like a nice racket. Process $1b in loans through some automated computer program and take $30m off the backs of small businesses and taxpayers without having to contribute anything to society! Just prioritize the wealthiest clients to make the most money with the least risk.

We’re going to be bailing out the banks for a lot longer than consumers... with high unemployment, it’s just before bankruptcy and loan defaults skyrocket up. This will continue if the economy doesn’t return to normal as businesses fail for years to come under higher loan levels and less business.

3% is what these banks use to cover their defaults and other future bankruptcies... Yes, they were giving loans to the LA Lakers, obviously don’t want them to default on their bigger loans etc... at this projection into the future, that number should be closer to 8% or higher, 12% but even they can’t charge that on loans they just sell off to other people so they don’t have any risk.

Generally what banks do is a scam... they should be replaced with future-credit scheme that is available with risk and reward equalizing insurance... you pay in the risk with other people who want to “fund” you with loans etc but the risk category/level is what generally says you won’t earn that much in the future because it goes to covering the other failures in the loan risk level. That is, someone who gets loans in the lower risk levels never helps pay back the loans in the higher risk categories... which is the opposite of what the banks do now with completely spread out risk to everyone who works with banks... what banks do is a “managed insurance” scam because they should be required to have insurance parameters and risk profile pools on the loans they make with the loan origination fee fully tied to the performance of the loan (no up front skimming), and not what we have now that is originate loan and sell-loan off...

Once you shrink the size of the risky bets and make them aware of the risks, the civilization would be much more stable AND better able to focus on its future.