Why Aren't the Banks Getting Loans Instead of Handouts?
Small business owners all across America are looking at their bottom lines and asking "Where is my bailout". This is the common response to the choice by the United States Government to dole out hundreds of billions of dollars to failing banks at the end of 2008 and now into 2009. Very smart business men and women are looking at the bottom line and asking lots of questions. One of the most common questions, and one not often answered by the news media is "Why aren't the Banks Getting Loans Instead of Handouts". Believe it or not, the logic behind the choice to give the money rather than loaning it is quite flawless. The reason the press doesn't give you the answer is that the answer is a well known cure for insomnia. Up late? Read on!When most business people think of banks, they think of business in a linear fashion. Product or service costs X dollar
s and after mark-up, consumers buy the product for Y amount. It's easy to mistake banks as falling into the same category, especially when they ding you for using outside ATM machines, monthly service fees, multiple fee fees, and etc. The list goes on. The truth of banking, however is that banks are not in business to service accounts. They are in business to loan money. Money factoring is very complicated and runs on a variety of algorithms, regulated by a lot of policy and more law than you even want to think about, but the concept is simple enough to grasp. Money factoring essentially makes it possible for banks to borrow a multiple of their on-hand assets from the Federal Reserve, a private enterprise that most people errantly assume is owned by the United States Government. When a bank has a million dollars on hand, it can make loans of about 10 m
Some topics in this essay:
Reserve Banks,
Handouts Believe,
Jimmy Stewart's,
United Government,
,
Federal Reserve,
Wonderful Life,
banks borrow,
money factoring,
looking bottom,
banks business,
united government,
loan money,
federal reserve,
banks money,
money loan,
borrow money,
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Approximate Word count = 578
Approximate Pages = 2 (250 words per page double spaced)
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