The Obama administration promises us a program of forced lending by banks. By this means, they intend to promote economic recovery. Amazing as it seems, our major officials do not understand that forced lending by banks severely undermines an economy. Subsidizing loans will destroy the market for bank credit. Bank credit will no longer be allocated by rational means of comparing real costs to real benefits. The results will be to harm many people and worsen the structure of the U.S. economy. In his testimony of Jan. 21, 2009, before the U.S. Senate Committee on Finance, Timothy F. Geithner told … Continue reading Undermining the Economy