Hey, suppose we had a rational way to evaluate business and home loan risk. I don’t think we can truly solve our financial/social crisis without fixing the underlying risk-valuation issue.
However it’s done, let’s imagine for moment that we had such a thing. Furthermore, let’s imagine that we had some way of assessing that risk relative to benefit for those doing the loaning. If the government is loaning, that means public benefit (under some political process).
If we did have such a thing, wouldn’t the most efficient way of stimulating the economy be to provide business and public loans at an interest rate based on that assessment? In particular, worthy projects might get zero or even negative interest, depending on how much we turned up the dial on desired stimulus. It’s not a blind hand-out, as borrowers have to justify their projects and make regular payments. The loan can be called in the usual way if payments aren’t made. The stimulus is in adjusting the balance-point of go/no-go.
Would Republicans support such a plan? Would Democrats? If labeled as a banking system, then I suppose neither. But what about defining it as a rational way of conducting the stimulus? With a side-benefit of kick-starting a more efficient and maybe less corruptible system of risk evaluation?
