Quote:
Originally Posted by pip08456
Are you for real???
Why did the Government need to spend Billions bailing out banks?
The banks had the money, invested it in dodgy deals and lost it. The money existed to begin with so where's it gone?
Because of the bailouts the Government then had to reduce spending as it no longer had the money as they'd spent it.
Whichever way you look at it someone ended up with the money.
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Charming!
Banks lend more money than they have deposits for. They depend on people not asking for it back at the same time, otherwise the bank collapses. They lend a multiple of their deposits.
Where did the money go? Partly the US housing crash. People in the US were persuaded to buy houses they couldn't afford to buy. They couldn't keep up the repayments and those houses were repossessed and sold for a fraction of what they bought them for or left to decay.