What aspect of the ‘lending model itself’ caused the current slowdown (I won’t call it a ‘depression’ yet, but that could happen next)?
Very low short term interest rates. When the rates are set super low, you have business and the masses all borrowing to have today what they will pay for tomorrow. This creates a massive, unsustainable debt overhang. The banks stop lending because of the risks of default. American economy led to believe ‘credit’ is money. Wrong. Credit is just credit. Credit used is debt.