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ArbitraryValue@sh.itjust.works ⁨3⁩ ⁨days⁩ ago

It’s not actually ridiculous in principle.

Let’s say I start out owning a bank with ten billion in assets, and the bank’s value comes entirely from its assets so it’s worth ten billion.

The bank loans its ten billion to you, and you pay me those ten billion for the bank. Now I have ten billion in cash instead of a bank that was worth ten billion, and you have a bank worth ten billion to which you owe ten billion. No one’s net worth has changed.

You default on your loan to your own bank. Now the bank is worthless (its worth came entirely from the loan) and you have no debt, so your net worth is still zero. Effectively nothing has happened.

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mech@feddit.org ⁨3⁩ ⁨days⁩ ago
But now you can lobby the government to bail out your bank using tax money.

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merc@sh.itjust.works ⁨3⁩ ⁨days⁩ ago

The bank loans its ten billion to you

A bank that’s subject to government regulation isn’t going to do that unless “you” have billions in assets to justify that kind of sale.

and you pay me those ten billion for the bank

And surely you report that sale on your taxes and pay the relevant taxes, right?

No one’s net worth has changed.

Except you, once you’ve paid your taxes.

You default on your loan to your own bank.

Ok, so “you” missed the payment. Now what? You think “you” can walk away cleanly? Declaring bankruptcy to wipe your debt is only something that’s available if the government provides that kind of mechanism, and generally that’s only available to people who have otherwise followed all the rules, which wouldn’t include buying a ten billion dollar bank when they had no assets.

The only way this scenario works is if you ignore all the laws. But, if you’re ignoring the laws, why not just make it simpler and simply steal the bank’s assets?

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- davidagain@lemmy.world ⁨3⁩ ⁨days⁩ ago
  Sweet of you to think that people this rich typically pay their taxes.
  
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- ptu@sopuli.xyz ⁨3⁩ ⁨days⁩ ago
  Geesh, your point made me think that it wasn’t an actual career path
  
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zr0@lemmy.dbzer0.com ⁨3⁩ ⁨days⁩ ago
Except that there is also value from other clients and from the brand, which is then helping you to actually earn money

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gegil@sopuli.xyz ⁨3⁩ ⁨days⁩ ago
Is capitalism real?!?!n1?

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marcos@lemmy.world ⁨3⁩ ⁨days⁩ ago

Effectively nothing has happened.

A lot of people lost a lot of their money and got their lives destroyed. Also, the previous owners liquidated their shares.

But yeah, you haven’t got any richer.

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stickyprimer@lemmy.world ⁨3⁩ ⁨days⁩ ago

nothing has happened

Right, which is why it’s not some hero-swaggers-triumphantly maneuver. That’s the ridiculous part.

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