Why can’t govt act as a bank – with low interest loans, etc.?

Question

If banks create money when loaning money, why can’t the govt do so, but with lower interest rates? E.g. on mortgages, or pay day loans, so citizens don’t end up in debt.

Presumably because it could cause another 2008?

In: Economics

Answer 1

Banks don’t create money. The government creates money.

And personal banking isn’t something the government wants to get involved with except on an oversight basis.

And the government has a lot of oversight of those banks, most of which normal people never hear about because the government keeps it running.