“Yes the bank LOST money, but the economy didn’t. The money remains in the economy, someone else just now has the bank’s money.
You are confusing money that is lost to an entity with money that disapears from the economy.”
I respectfully point out that the statement: “Yes the bank LOST money, but the economy didn’t.” makes no sense and is in and of itself a contradiction.
This money that the bank lost is real money. It is money that will not be available for other productive uses, it is money that will not be available for other borrowers.
When a bank can’t or won’t loan money, the economy suffers greatly.
“You are confusing money that is lost to an entity with money that disapears from the economy.”
Again, I struggle with how to respectfully assert that this statement is completely incorrect. I cannot understand how you could believe this to be true.
I appreciate the discussion, I really do, but as poor a student of economics as I am, I really think you are worse, and I mean that in a nice way!
God bless you and your family. I take it that you are an engineer. I love engineers. You guys make everything work. I assure you that I am right on this, but that is what ignorant people always say on Free Republic.
Engineering is based on physics. Matter/energy is neither created or destroyed. Neither is money on a micro level. The fed can print more or it can burn more to adjust the money supply, but our everyday real estate transactions don’t count. Money doesn’t disappear.
Happy New Year!