borrower

Every debt has a lender and a borrower and the borrower does not force the lender to lend.

Well, in theory the broker is getting paid by the lender, not by me (the borrower).

Lending is when the lender takes money that they have, and give it in the borrower in return for a future claim of money from the borrower.

Every borrower of money has to come to terms with the lender, or there will be no money.

It's like a lender trusting a borrower willing to prostitute or sell his children above an unwilling one.

Instead of just having to account for default risk, you also need to worry about the borrower repaying early.

Collateral must always be placed where those who lend the money can get at it if the borrower breaks the terms.

But the net effect is the same: a borrower with a negative real interest rate is being paid to hold your money.

The rationale behind bankruptcy is this: if a borrower cannot repay their debts in full, the lender cannot receive them in full.

When things go bad, the borrower suffers bankruptcy and the lender suffers a default.

So there's still risk of non-repayment, if the borrower stays poor until his/her death.

Both the lender and the borrower have responsibilities when it comes to loans.

If two banks create 400k and then each borrower buys land with this 400k and the seller then deposits the fresh "money" with one another's bank they have 400k credit.

When it comes to the Greek debt fiasco, Shakespeare said it best 400 years ago: "Neither a borrower nor a lender be, For loan oft loses both itself and friend, And borrowing dulls the edge of husbandry."

Many people have been saying for a long time, on "the left", that the fact the government guarantees repayment of loans even if the borrower declares bankruptcy is a classic case of actual moral hazard (wherein improper guarantees to make a lender whole no matter what lead to irresponsible lending, since there are no negative consequences for the lender).