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Central Banking or Nationalized Banks?

In the aftermath of the bubble burst in '08, Iceland took a radically different path than the United States after their financial crisis and nationalized the banks, threw some people responsible for the crash in jail and bailed out the homeowners instead of worrying about only bailing out the banks. And now they're coming back and their economy is growing again... http://goo.gl/QuKGA

When the banks in Norway declined in 1992, the government simply nationalized them (instead of bailing them out leaving the tax payer to pay the bill) which gave the banking business a breather and was ultimately beneficial for its citizens, because the banking business returned to more traditional banking values, though it only was for a short period of time.

So, in terms of public prosperity is there any merit left to keep the current central banking system, with many private banks and one central bank, instead of nationalized banks?


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  • Nov 10 2012: the whole premise of private banks is detrimental to society. the more heavily indebted people are, the more banks profit, so they have incentive to keep people under a burden of debt.
    also such banks necessarily are not ideal for a country's citizens, since the bankers' large salaries and bonuses, plus shareholder dividends must all be paid for in higher interest rates, which means people have less money to spend on general consumption. in this way private banks really are a leech on the economy.
    making it simple is the best way to go. one national bank in each country, free from private interest or influence, running at cost for the benefit of the citizens. it's good that norway and iceland have started taking out the trash.

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