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
At least from a US perspective, the government very much does do this for mortgage loans—it’s just hidden. Between FHA loans, VA loans, USDA loans, Fannie Mae, Freddie Mac, and Ginnie Mae, the Federal government is very involved in that market.
The government is involved in the student loan market too, although there are private lenders obviously.
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