How about American Banks?

If you put your money into a bank, what do you have to look forward too?

• A very low interest rate
• The potential that the bank may go out of business

When you put your money into a bank, are you expecting to have this money put at risk? People put their money into banks because they do not want to take big risks; they want their money to be secure. That really does not work if the bank takes the risk (with your money) anyway. Not only is the bank taking big risks with your money, they are paying managers huge salaries and bonuses. For what? Making bad loans? Taking huge risks with your money?

The real issue is credit cards and other "retail" debt. Retailers want to be able to make sales to customers that do not have the money to make the purchase. And, they also do not want to take the risk of loaning that money to the customer directly. Hmm - let's think about this again. What, are we stupid?! I am sure it makes perfect sense to a banker that wants to keep getting his/her million dollar bonus. But, is it really fair to the American people, who are going to get stuck with the bill for those who have spent money they do not have? The biggest irony is that the retailers shift the risk to the banks, and the banks shift the risk to the government and ultimately to the American taxpayer. Clearly, if certain American taxpayers did not spend money they did not have in the first place, we would not be where we are today. Then, there's the accountability; if a retailer wants to sell something to someone who cannot afford it, they should be the ones taking the risk - not the American taxpayer!
So, what is the answer? Well, let's keep it simple ...

Americans needs some place to put their money where:

• The money is 100% safe (insured)
• They will be paid a fair interest rate
• Their money will not be put at risk - forcing the government to bail out the bank if the bank's management makes bad decisions
• The bank is not paying huge salaries to its management while only paying depositors a ridiculously low return on their money

Here's a thought: why not have banks that are only allowed to make certain stable investments with depositor's money? These banks could be 100% insured by the FDIC - this would be less risky than the banking model today, because the banks would not be taking on risky loan portfolios (e.g. credit cards and other unsecured debt). If banks take deposits from American taxpayers, they should have a responsibility to use the money in a way that will ultimately benefit the depositors directly, and the American public in general.

So, why not have Deposit Banks and Credit Banks?