In a NPR report that I heard (though cannot seem to find, so take this statistic with a grain of salt) that about 1/4 of the U.S. GDP is banking. This seems crazy to me. People who are not in reality making anything are accounting for huge pieces of our economy. It is true that bankers are an integral piece of the economy; helping people who are producing real things to succeed. Unfortunately, I cannot stomach 1/4 of our economy.
On one of may favorite Podcasts, Stuff You Should Know, they talked about credit default swaps. They said that in 2007, the global GDP was 67 trillion and the value of credit default swaps in the world was 62 trillion. Essentially, insurance on other's bank investments is almost as big as the world economy.
I gotta ask- as a country are we investing our money in the wrong place? It seems like we are merely inflating the few inventions that we already have without innovating anything new.
I cannot say if our country is investing in the wrong places, but the "1/4 of the GDP" does not strike me as that odd. Businesses make products/provide services, and they earn money; but the market 'makes' money, so, in a way, it would seem that only investors actually make money. Since they are the one that make money and the U.S. economy is, generally, growing rapidly, it is logical that banking is a large part of our GDP.
ReplyDelete"the market 'makes' money." Doesn't it seem odd that we are rewarding people who gamble on others inventions over those who actually invent?
ReplyDeleteBasically, I understand that banking is important to provide innovators with capitol to put their ideas into practice but, beyond that, how big of a role should it play?