cant agree thats always true... in the Great Depression in the US, banks went bankrupt from lack of liquid capital because of bank runs that people were making. Depression hurts the whole economy as a whole although arguably certain individuals will be able to make profit from the chaos.
There's a few somethings inherently wrong with this statement... 1) Third world countries get money and are bailed out by the World Bank 2) Banks don't own housing or own very little because they're forced onto them from defaults(US anyways), banks wouldn't be caught dead owning housing since it makes no money for them... and even if banks did, they'd sell immediately at market to get rid of it... 3) Banks have no control over recessions no one does, the body overlooking the financials of a country, the US Government for example, essentially help maintain growth and decrease the impact of recession from getting out of hand with interest rates and price of bonds, etc... If the banks actually had control, the politicians would get incredibly pissed cuz recessions make politicians take hits for the recessions... 4)Your hotel example is completely simple and naive at points... banks are not the only way people can raise capital... Partners, Shareholders, Bonds are some other ways of achieving capital so that your example would never happen in the first place... any business that runs into your kind of example deserves to die out for being completely inefficient... Whole Foods is an example of how someone can get capital for an organic food product... 5) and Renegade_Cash is right... Bear Stearns anyone? o and -bigclap for Data_Beast...
I BLAME BUSH 3 words that can sum up the US economy reason why we are so much in debt. The US economy was doing fine until sept 11 happen and Bush found an "opening" or reason to invade Iraq for its natural resorces mainly oil. Quite frankly Bush has business in the Oil market and seeing as his presidency is coming to an end he is using all that he can to maintain the hold on Iraq oil and spending ridiculous amount of money that could be used on other things; 9 trillion is seriously way too much spending. Possible solutions? New president please, more funding in the banks, decrease inflation to regain the dollar value against the pound, the only way to pull away from this situation is for the U.S. to stop funding redundant wars for personal gain -.-; w/e im a noob lol educate me XD
Good to to hear theres another economic enthusiast in the forums. Well as far as the economy for the US it is literally in shambles. Although economic policy is applied to prevent a massive recession in the country it is quite useless because the actual driving force are the banks. If you picke dup a copy of The Economist last week it basically tells us that the banks are in a situation where they can't really "trust each other" and that they are finding ways to combat their debts in their balance sheet. From poor practices from banks the liquidity is very dry in the economy and investors are writing down assets. Additionally with the fiasco with Bear Stearnes, investors and citizens alike are more skeptical about bank and the government policies on running the economy. In regards to taxes, they are never permanent as they distort the economy in the long run and consquently they have to sooner or later raise taxes again. In turn, im not sure on how Bush comes into the picture but i know for a fact that banks are the driving force for the recession with their bad decision on credit lending and trying to gain AAA credit apporval from authorities even though their credit rating is terrible.
