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“The justification of private profit,” said President Franklin Roosevelt in a 1938 address, “is private risk.”
Banking has now been made virtually risk-free, backed by the full faith and credit of the United States and its people.
The American people are therefore entitled to share in the benefits and the profits. Banking needs to be made a public utility.
But President Franklin D. Roosevelt, who took office in 1933, was skeptical about insuring bank deposits.
He warned, “We do not wish to make the United States Government liable for the mistakes and errors of individual banks, and put a premium on unsound banking in the future.”
The government had a viable public alternative, a US postal banking system established in 1911. Postal banks became especially popular during the Depression, because they were backed by the US government.
But Roosevelt was pressured into signing the 1933 Banking Act, creating the Federal Deposit Insurance Corporation that insured private banks with public funds.
In March 2020, under cover of a national crisis, the Fed therefore flung the doors open to its discount window, where only banks could borrow.
Previously, banks were reluctant to apply there because the interest was at a penalty rate and carried a stigma, signaling that the bank must be in distress.
But that concern was eliminated when the Fed announced in a March 15 press release that the interest rate had been dropped to 0.25% (virtually zero).
The reserve requirement was also eliminated, the capital requirement was relaxed, and all banks in good standing were offered loans of up to 90 days, “renewable on a daily basis.”
originally posted by: Lumenari
a reply to: FyreByrd
I can see why you like Ellen... just another Progressive that wants to nationalize another big industry (banking).
You know, since putting the Federal Reserve together and in charge has helped us so much in that area.
Much like trying to nationalize Health Care worked out so well...
Let's just make her President and get the reset going.