The Federal Reserve seems to think that a dollar of credit-in-use is just as good as a dollar of money in circulation. It isn't just as good. It's better (for the lender) and worse (for the borrower) because of the cost of interest that applies to credit but not to money.
Better for the lender and worse for the borrower. Doesn't that explain the growth of finance? Doesn't it explain the laggard performance of the economy?
We need to take income out of the non-productive sector and put income into the productive sector again, where it was when our economy was good.Read it at The New Arthurian
Andrew Haldane: Financial arms races
By The Arthurian
If you haven’t Haldane yet, you should read some his work immediately. He is the Executive Director of Financial Stability at the Bank of England and a brilliant writer, especially on matters of banking. Attempting to solve this problem, The Arthurian also provides policy recommendations and addresses those suggested by Andrew Haldane.