<instructions>Your goal is to analyze the following comment and estimate how highly it will be upvoted by the Hacker News community.</instructions><comment><author>JSavageOne</author><text>As the other commenter mentioned, most student loans are guaranteed by the federal government, meaning that the bank is compensated without taking any risk. Student loans in particular are insidious because non-payment can result in one&amp;#x27;s wages and social security being garned, and it&amp;#x27;s one of the few loans that doesn&amp;#x27;t go away in bankruptcy.&lt;p&gt;Regarding mortgages, auto loans, business loans, the key point is that the money is created out of thin air. 80% of bank credit goes to mortgages, which ultimately drives up prices and fuels housing bubbles.&lt;p&gt;The Great Recession and Great Depression were &lt;i&gt;caused&lt;/i&gt; by the finance sector. The Great Recession was the result of banks fueling a housing bubble by loosening lending standards, driven by the peddling of risky financial securities like CDOs, and leveraged to the tilt by derivatives like credit default swaps. When it all collapsed, they had to be bailed out (while Main St never got one). The Great Depression was preceded by a stock market bubble fueled by speculators trading on margin.&lt;p&gt;The banking industry does not create wealth. It is a middleman with the monopoly privilege of creating money out of thin air in exchange for dishing out collateral-backed loans of this funny money, and has 1. too much power, and is 2. overcompensated for it&amp;#x27;s &amp;quot;work&amp;quot; 3. in the long-term will reduce our competitiveness and lead to our relative demise (eg. look at General Electric).&lt;p&gt;You&amp;#x27;re failing to envision an alternative where credit is more democratically allocated, where finance isn&amp;#x27;t so overcompensated and such a brain drain attracting our brightest minds, and where the government can offer $350b in small business loans during a crisis without some middlemen taking a ludicrous 3% fee for shuffling some papers.</text><parent_chain><item><author>LatteLazy</author><text>Finance is a very important industry that adds a lot of value. If you get a student loan, you can go to university tomorrow and earn more in a few years, that&amp;#x27;s much more valuable than spending 20yrs at McDonald&amp;#x27;s earning nothing and saving very slowly to pay for your degree upfront as you would have to otherwise. Ditto mortgages. Ditto getting a car or starting a business or basically anything finance permits.&lt;p&gt;The great recession after 2008 and the great depression both show what happens when finance stops working. The rest of the economy collapses without it. You can all the way back to medieval Kings to see how important it is.&lt;p&gt;I don&amp;#x27;t know where people get this idea finance is not &amp;quot;real&amp;quot;. If it wasn&amp;#x27;t useful, people wouldn&amp;#x27;t be paying for the services it provides, they&amp;#x27;re all optional.</text></item><item><author>JSavageOne</author><text>You outline the problem very well. The banking sector has an ENORMOUS amount of power over the economy&amp;#x2F;society in a way that no other industry does because it literally has the ability to create money out of thin air (by loaning it into existence). The banking industry is the arbiter and credit in our society and decides where money get allocated.&lt;p&gt;This would be fine if it were their own money, but it&amp;#x27;s not - it&amp;#x27;s our bank accounts (ie. fractional reserve banking). Unfortunately individuals can&amp;#x27;t opt out of this because unlike private banks, individuals aren&amp;#x27;t allowed to open a bank account directly with the government (though these replies show that this is possible in countries like France).&lt;p&gt;The finance industry does not generate real wealth, it is a wealth extracting industry that profits off the spread between the interest rate decided by the central bank and the interest rates and fees it charges consumers. Banks do not create goods or services, they just decide who gets the money to do so, with money that&amp;#x27;s not theirs. 80% of bank credit goes to mortgage loans (driving up housing prices and saddling homeowners in debt). Banks have gone from 2% of the U.S. economy in the 1950s to 8% by 2008, and 1.5% of the British economy in 1978 to 15% by 2008.&lt;p&gt;The first step to fixing this is to give citizens the ability to opt out of private banks and bank directly with the central bank. Private banks should not be the only ones with this privilege.</text></item><item><author>lordnacho</author><text>Gotta ask whether the banking system makes sense in its current form.&lt;p&gt;- Part of it is actually a utility. Payments, sending money from one place to another, making sure there&amp;#x27;s an account at the other end of that number. Everyone needs this, yet being a huge international network there isn&amp;#x27;t a whole lot that one bank offers that another cannot.&lt;p&gt;- Part of it is deciding who to lend money to. Makes sense for the bank to decide this with its own money.&lt;p&gt;- Part of it is regulatory. We don&amp;#x27;t want money laundering. Have to ask whether this really ought to be up to law enforcement to do, or as it is now a massive burden on the banks, which also have bad incentives.&lt;p&gt;What if we had the central bank give everyone an account that was interoperable with the rest of the banking system? Then if you want to hand out money, you just do it. If you want to borrow money, find a lender.</text></item></parent_chain></comment><story><title>Small business rescue earned banks $10B in fees</title><url>https://www.npr.org/2020/04/22/840678984/small-business-rescue-earned-banks-10-billion-in-fees</url></story>
<instructions>Your goal is to analyze the following comment and estimate how highly it will be upvoted by the Hacker News community.</instructions><comment><author>PeterStuer</author><text>You are basically arguing that the burglar that holds a gun to your head and threatens to pull the trigger if you stop giving him food is &amp;#x27;essential&amp;#x27; in your survival so you can not do without him.</text><parent_chain><item><author>LatteLazy</author><text>Finance is a very important industry that adds a lot of value. If you get a student loan, you can go to university tomorrow and earn more in a few years, that&amp;#x27;s much more valuable than spending 20yrs at McDonald&amp;#x27;s earning nothing and saving very slowly to pay for your degree upfront as you would have to otherwise. Ditto mortgages. Ditto getting a car or starting a business or basically anything finance permits.&lt;p&gt;The great recession after 2008 and the great depression both show what happens when finance stops working. The rest of the economy collapses without it. You can all the way back to medieval Kings to see how important it is.&lt;p&gt;I don&amp;#x27;t know where people get this idea finance is not &amp;quot;real&amp;quot;. If it wasn&amp;#x27;t useful, people wouldn&amp;#x27;t be paying for the services it provides, they&amp;#x27;re all optional.</text></item><item><author>JSavageOne</author><text>You outline the problem very well. The banking sector has an ENORMOUS amount of power over the economy&amp;#x2F;society in a way that no other industry does because it literally has the ability to create money out of thin air (by loaning it into existence). The banking industry is the arbiter and credit in our society and decides where money get allocated.&lt;p&gt;This would be fine if it were their own money, but it&amp;#x27;s not - it&amp;#x27;s our bank accounts (ie. fractional reserve banking). Unfortunately individuals can&amp;#x27;t opt out of this because unlike private banks, individuals aren&amp;#x27;t allowed to open a bank account directly with the government (though these replies show that this is possible in countries like France).&lt;p&gt;The finance industry does not generate real wealth, it is a wealth extracting industry that profits off the spread between the interest rate decided by the central bank and the interest rates and fees it charges consumers. Banks do not create goods or services, they just decide who gets the money to do so, with money that&amp;#x27;s not theirs. 80% of bank credit goes to mortgage loans (driving up housing prices and saddling homeowners in debt). Banks have gone from 2% of the U.S. economy in the 1950s to 8% by 2008, and 1.5% of the British economy in 1978 to 15% by 2008.&lt;p&gt;The first step to fixing this is to give citizens the ability to opt out of private banks and bank directly with the central bank. Private banks should not be the only ones with this privilege.</text></item><item><author>lordnacho</author><text>Gotta ask whether the banking system makes sense in its current form.&lt;p&gt;- Part of it is actually a utility. Payments, sending money from one place to another, making sure there&amp;#x27;s an account at the other end of that number. Everyone needs this, yet being a huge international network there isn&amp;#x27;t a whole lot that one bank offers that another cannot.&lt;p&gt;- Part of it is deciding who to lend money to. Makes sense for the bank to decide this with its own money.&lt;p&gt;- Part of it is regulatory. We don&amp;#x27;t want money laundering. Have to ask whether this really ought to be up to law enforcement to do, or as it is now a massive burden on the banks, which also have bad incentives.&lt;p&gt;What if we had the central bank give everyone an account that was interoperable with the rest of the banking system? Then if you want to hand out money, you just do it. If you want to borrow money, find a lender.</text></item></parent_chain></comment><story><title>Small business rescue earned banks $10B in fees</title><url>https://www.npr.org/2020/04/22/840678984/small-business-rescue-earned-banks-10-billion-in-fees</url></story>