Entertainment
Unraveling Jon Stewart’s Misconception About Trump And Bank Loans
Clear Facts
- Jon Stewart recently suggested that loans given to high-profile individuals like Donald Trump can result in fewer loans available for other borrowers.
- However, banking professionals indicate that a loan given to one customer does not subtract from a fixed pool of loans available to other customers.
- Stewart’s comments reveal a common misunderstanding of banking practices, as loans actually create deposits and can be backed by capital in accordance with regulatory requirements.
This week, comedian Jon Stewart touched on the topic of bank loans in relation to an ongoing civil real-estate case against Donald Trump. Stewart suggested that the funds allocated for Trump’s loans could have resulted in a decreased number of loans available to other borrowers.
“Money isn’t infinite. A loan that goes to one person doesn’t go to someone who’s giving a more honest evaluation. So the system becomes incentivized for corruption,” Stewart said.
However, banking sector experts were quick to point out that Stewart’s claim isn’t entirely accurate.
The reality is that the amount of money available for loans does not necessarily diminish when banks make loans to other customers. This is true unless a bank is in a state of severe distress and is capital-constrained. Essentially, a loan to one customer does not subtract from a hypothetical fixed pool of loans available to the bank’s other customers.
Stewart’s comments seem to reflect a common misunderstanding of how banks operate: a bank is not a physical money vault where lending some money leaves less money for future loans.
In fact, bank loans create deposits. These loans must be backed by capital as per regulatory requirements. However, well-capitalized banks never run short of capital to make new loans.
Banks can back up deposits with reserves, and if they run short, they can borrow these reserves from other banks. Therefore, when a bank makes a loan to a customer, even a high-profile one like Donald Trump, it does not result in less funding for loans to other customers.
While money isn’t infinite, as Stewart accurately highlighted, bank loans do not diminish the amounts available for other bank loans. This is a crucial facet of financial intelligence that should be more widely understood by the public.
Let us know what you think, please share your thoughts in the comments below.
Audrey Spaulding
March 29, 2024 at 7:10 pm
Obviously Stewart is not able to keep his hateful opinion for Mr Trump in a correct manner! Even the fact that anyone knows that his information is nothing but BS! He has no clue what he is talking about! Perhaps next time he should keep his opinion to himself! If you feel your opinion is frankly a stupid way of expressing his disapproval of Mr Trump! I have always known he has little knowledge of what he is talking about it! Nobody cares what your opinion is !
Danny G Carter
April 2, 2024 at 6:48 am
Jon Stewart is among those Trump haters that wouldn’t agree with anything Trump did. Trump isn’t one of my favorite people but neither is Joe Biden. He took no salary as President and earned his fortune in business whereas. Biden has lived off the tax payers about all his life. The democrat party today is corrupt to the core and is a greater danger to America’s democracy than the Republicans are. That’s the purpose of opening our borders, to get millions of voters and create one party control. It is very much like socialism.
Malo Enuf
April 2, 2024 at 10:50 am
Biden living off earned income from public service is honest income of value.
Trump scammed the Presidency , gaining huge $ sums from emoluments, like charging government visitors for staying at his golf resorts. And you note he paid virtually zero US income taxes gor many years, by falsifying his claimed financial losses, which was proven in NY court of law, hence his fine of $475M,
Michael Gluck
April 2, 2024 at 3:21 pm
Malo Enuf, Do your damned homework before putting you TDS on full display. All of the profits collected from foreign dignitaries stays at his hotels was donated to the US treasury.
https://thehill.com/policy/finance/375645-trump-org-says-it-donated-hotel-profits-from-foreign-governments-to-treasury/
lou
April 2, 2024 at 8:00 am
The meat and potatoes:
However, banking sector experts were quick to point out that Stewart’s claim isn’t entirely accurate. Correct, when the theories of if are applied. The the write passes around the if of Stewart and applies its own if. Which is correct. Sneaky inferences.
Kadee
April 2, 2024 at 8:13 am
Jon Stewart-where/when did he get his financial degree? Just like the rest of Hollywood,if he didn’t have a script, he couldn’t make 2 complete sentences.
Master Glock
April 2, 2024 at 8:18 am
I agree Jon Stewart is a major Trump hater and to keep himself relevant he starts this off the walk narrative about the Banking Industry which he is NO EXPERT. This is a prefect example of ignorant Liberals spreading disinformation telling lie after lie until their Liberal base believes the lie. Jon Stewart should stick to things he knows about because Bank Loans is clearly NOT his Fortay. Trump isn’t one of my favorite people either. If a semi-intelligent person looks at the things Donald Trump accomplished in 4 short years while being hammered with hoaxes and frivolous law suits everyday, he did an amazing job. If the media wasn’t protecting Sleepy Joe everyday from scrutiny he’d be walking around in just his diaper. You don’t have to like the “man” on a personal level, but when the President is really an truly detecated to Making America Great Again…he gets my support and thanks. Joe Biden has done nothing but try to destroy the America we know and Love.
Lee
April 2, 2024 at 8:37 am
Maybe Stewert should stick with comedy, and stay away from economic principles.
Michael Gluck
April 2, 2024 at 9:29 am
Stewart is correct when stating the money supply isn’t infinite. Instead of directing his vitriol towards entrepreneurs who actually produce he should focus his attention on our government’s legislators who actually believe the money supply is infinite and need to reign in their reckless tax, print and spend policies which threaten the nations economic stability as well as the financial well being of all Americans.
Captain Cross
April 2, 2024 at 10:59 am
So Jonies solution is to deny major high profile developers loans that would effectively, if denied, would destroy metro infrastructure and growth. Believe it or not there Jon there’s obviously enough money to go around. Another shallow leftist has spoken.
jim
April 3, 2024 at 2:50 am
He is a Democrat so all he knows is what some other democrat idiots told him to say! Now he has become the poster child for what stupid and gullible looks and sounds like! So what really happened is Biden made him make a fool of himself! And that is typical for Democrats! They should all pray Biden doesn’t tell them to jump off a cliff! Even though the battle for which Democrat idiots got to jump first would be EPIC!