Federal Reserve, Richie, Jeez Teller Tower discussed on Heartland Newsfeed Radio Network

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Talk live go ahead. Hey guys thanks for taking my call. I I listen to you as faithfully as I can't every Sunday night and it's always a fascinating show that you guys have I appreciate that and we appreciate being on W. T. K. G. One of our longest running affiliates out there so if you like the show do us a favor and call up Phil Tower and tell thank you at W tk Jeez Teller Tower the program director there and he's had his on for a long time yeah yeah he's been around longer than Dirk. It's true though that you're the subject you're talking about forgiving student loans. My wife is a bank banker and you guys were talking about. You know how the banks kind of had to have a built in hedge against defaults on loans to be true. Yes I can Kim sure you that is not the case. They may have some they may have some protections for example of someone declares bankruptcy or default default on the mortgage. If you're talking one or two at a time or a few at a time that's manageable but when you're talking one point five trillion dollars all at one that the problem you can't just you know tossed the baby out with the bathwater so to speak because that's not good for anybody. Well wait a minute of the banks the the money from thin air in the first place through fractional reserve proposing going after the banks on this one because I think that would be bad for the economy. Okay hasn't the government taking over the student loan program cases yes in some cases. The government will guarantee he the loan in other cases the government is basically giving the loan and if the government which you know has a deal with the federal our reserve which was collection of major banks to just sort of make money as it parallels money to an existence if they just decided to cancel each other's debt yet no one really loses anything in this and then it would spur the economy whereas if the government decides to if the banks if the government decides to just force the banks to eat it yeah that would be bad for the economy but if the government says all right one one point five trillion dollars in debt. We're GONNA pent meant a one point five trillion dollar coin. We're GONNA make it at a ten because we don't want to spend the money on platinum and we're going to just hand that over. We're to the Federal Reserve and that will cancel one point five trillion of our debt that we guaranteed the loans with and then poof it all just disappears but what's okay but I guess I don't follow you're saying Mark Regarding the bank here so if the bank issues student loans and some banks have done that the bank issues a student didn't loan yup. They've created the money from thin air. You talked about this. I think last night about how when you sign a loan you know authorization and they're not on the hook for it. This'll be taking them off the hook for your cancelling the debt while the if the government cancels the debt yes if the government as the bank credits the bank for their loan so let's. Let's say you're a bank. I'm the Federal Reserve. The money came out of nothing so they don't let me take and I'm the Federal Reserve all right a member bank because basically basically you can't be a bank without being a member of the reserve you at Richie comes to you for a student loan. Okay okay. He says I'd like student. Loan hundred thousand dollars created created the book Richie can't pay this was a terrible idea. I should've never backed this as the government but you're going to give the loan because I'm the government and I'm backing it right the alone for one hundred thousand dollars of money that never existed before we loaned never existed before you loaned it right now. It's exists but Richie can't pay it back and it never gets paid back doc right right well that loan is still on your books and you are responsible for it to the to the the Federal Reserve. It's been created yeah. It was created out of thin air. It's to your investors. I don't know it's it's Monday was created out of nothing right. So how can you be responsible for something something that was created out of nothing back basically all that's happening here for my understanding and by the way I'm not you know an expert at these things but you're you're just what's happening is when these loans are created headed. It's money coming out of nothing because this is the fractional reserve system. This is the sort of the benefit of these banks being tied into the Federal Reserve. They're given the ability to issue money in in these in the form of these loans that never existed before it's just numbers in a in a system so they I you know I give you this loan Ritchie one hundred thousand dollars to go to college the this whole whole loan forgiveness thing comes in and you're like what you walk away and we just basically ignore the fact that you owe us money. We just cancel the account that just means that extra hundred thousand in dollars is out there and it never gets. It never comes back in so inflates the money supply but that's already been done. The money supply was inflated when we issued the loan in in the first place so whether it comes back or not. Is it really going to make that big of a difference on inflation in the long term choirs. Here's here's had missing. Here's the thing where a capitalist economy or a capitalist society so where does it end. It's not even just about the economics in terms of this particular subject. I have a mortgage. Why can't I have my mortgage forgiven? I made the choice to buy a home run. If I'm in over my head why can't Mantha banks just forgive that loan it's about responsibility it's about life choices because and I tend to agree with you. Support the idea bank younger generation wants everything hands free healthcare free college free everything they want to have it handed to them without having the opportunity to actually earn it and have some sort of a sense of self satisfaction in the fact that they've worked what I'm in my fifties and I've earned and worked for everything that I know was would ever given me anything that I didn't back. No I totally understand where you're coming from. I mean I like I said I in favor the idea bankruptcy at all but mark you made a strong argument that a lot of these college loans were based off of fraud where these young people were told. Oh you're going to do so much better in life if you get a college college education and they don't tell you that you need to go get a degree that you can use to get a job right. I was just Jujitsu on Thursday night with a young man getting ready to graduate this year I asked him what is degrees any says Biochem. I said good for you and you know I mean he's absolutely going to be able to go out and get a job with a Biochem degree how the flute the last person I talked to last woman I talked to that was going to that school was getting a women's studies degree very in that for you can look at herself so I wanna I wanna go back to what you said initially Robert Again at the beginning of your call call because I think there's there's a lot to parse out with the entire discussion my point with saying that the banks had built into the interest rate is not saying that I I agree that wiping out one point five trillion dollars off the books. is is a good thing. What I'm saying is if you look at like payday lenders versus banks? Thanks right there. There's an inherent risk to loaning money out to people with the you know a lower ability to repay that loan right so when banks when banks or payday lenders or any lender at all assesses the viability of a loan being repaid they make a decision as to the interest rate to charge based on the risk that they're taking gene at that time right and I'm also suggesting that especially payday loans at banks that interest rate is based on the fact that they do not intend and to recoup all the loans laid that they lend out they know that not all loans are going to be repaid in order to recoup the funds. They set interest rates on people who we'll pay. Maybe a little bit higher to make up for it but the difference is between say a regular bank loan for a house if there is a default on that loan for House. The bank has an asset right right right. Try to recoup that's where they had just not about the interests that they charge. It's about the assets that they have the Laurie points today Robert Nothing I can take back yeah. You can't lock the kid up. Hey thanks for the call tonight..

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