tag:blogger.com,1999:blog-2277215496195926573.post3797321299559098398..comments2024-01-01T07:41:51.347-08:00Comments on RALPHONOMICS: The Economist’s ideas on why debts are so high.Ralph Musgravehttp://www.blogger.com/profile/09443857766263185665noreply@blogger.comBlogger1125tag:blogger.com,1999:blog-2277215496195926573.post-18642902650471904022015-05-27T03:27:40.600-07:002015-05-27T03:27:40.600-07:00I think this is correct.
Giethner said in his rece...I think this is correct.<br />Giethner said in his recent book on the crisis that the main asset banks have is their "credit worthiness",take that away and they cannot function.The government thus ensures that banks and their actual assets are backed by the state in a crisis until such a time as things return to normality.Bank's creditworthiness becomes the state's creditworthiness.<br />No other industry gets this very generous back stop so comprehensively.We now have a banking sector that, in the main,will be bailed out in the "national interest".You can scarcely put a price on that kind of back stop.It is an immeasurable subsidy,since it is backed by the entire fibre of any nation.vincehttps://www.blogger.com/profile/05690045138539663594noreply@blogger.com