The Depression of 2008

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Posted By: Fred C

Thanks for the economics lesson. Perhaps you can help me understand something. If the govt "print's" more money or makes more money available then that money needs to get into the economy to be useful (for the most part).

If people can't qualify for loans then that money does not get into the economy as fast. Can financial institutions use that money to make their balance sheets look better - when in reality the balance sheets aren't so nice? Isn't that only masking the problem.

If people don't pay back loans then someone has to pay for it Who pays for it? Isn't it usually the people that invested into the companies (financial institutions) that provided the credit or bought all the bad credit paper that get hurt? I suppose if you throw more money at the problem it will make things look artificially right. Well, at least until that house of cards collapses. I'm not a doom-sayer but I kind of try and look at everything realistically. I'm not an economics major but then I bet you could put 10 different Ivy League educated economists into a room and there wouldn't be a consensus on the state of the economy. In other words, nobody can predict what will happen next so why bother.