When the party has to stop

Ultimately all financial crises are caused by greed. The rich want to become richer, and so they indulge in financial speculations that are aimed to increase their wealth for the minimum amount of work. The banks want to become richer, so they indulge in fractional lending, where they leverage their lending on the basis of what the market will lend to them, rather than on the deposits they have from customers. The poor want to become richer and demand services and money which has to be paid by the rich to some extent but by the people who are neither rich nor poor to a greater extent. Democracy is merely the least bad system of government and so the electorate votes for politicians who promise to spend money on them. The politicians spend money that they have not raised in taxes. Continue reading