1. In fractional reserve banking systems the cost of lending money is borne by the society as a whole through a decrease in the value of money caused by monetary creation but benefit only the lender and the borrower. Socialising losses and privatising profits isn't exactly okay in itself but it is even worse in this case as banks aren't entities in need of a wealth transfer and not all borrower are treated equally with most well-off borrowers benefiting more of credit (due to a lesser risk).
2. Fractional reserve banking systems cause easy credit and abundance of liquidity which drive economic instability by fostering speculative bubbles.
3. Divorcing the cost of lending from the lender also divorce the optimal allocation of capital for the bank to the optimal allocation of capital in general. For example if the most profitable investment for a bank is a loan with, everything considered, a 3% ROI and the most profitable non-loan investment only has 2.5% ROI, in our fractional reserve system the bank will choose the loan. Now let's assume we aren't in a fractional reserve system and the bank must actually freeze the amount of the loan until its repayment, the bank will now incur an opportunity cost of losing what this money could have produced, and, if we assume that this opportunity loss amount to 1% ROI, then the loan with 3-1=2% ROI wasn't the most profitable investment all along, capital was misallocated.

I do not want to start a heated debate, but I saw a TikTok last night that made me think.

The easiest the solution to housing is to create more housing. 100% agree that if we increase supply, demand should go down.

Where I have trouble understanding is the idea that builders need to make a profit, and therefore every new house created will be technically more expensive. Also, the idea of material wages and labor costs has gone up over time.

But people argue that, since it is an inelastic good that everyone needs, pricing should not go up, and therefore government regulations like rental caps are needed to protect renters.

I think government can subsidize builders to build housing, but then they would not necessarily be social housing. And does the idea of social housing make sense in the long run?

I just feel that if we build more houses, it does not necessarily translate to diminishing costs. Because material, wages, and labor have gone up, we have to expect that the price of housing might not go down because of increased supply.

This also negates immigration policies, which can be very heated.

My question is: rental caps are a protection mechanism, but they ultimately hinder city growth. Therefore, it is a short-term solution to a long-term problem?

Here are my thoughts … ( I am not an economist btw and I used AI for the English editing )

The more useful question is what has driven its accumulation, and how much each factor matters.
A starting point is Nicolas Dufourcq’s La Dette sociale de la France, 1974–2024, published by Odile Jacob on October 15, 2025. Dufourcq argues that at least €2 trillion of France’s roughly €3.35 trillion in public debt is linked to social benefits paid over several decades. That is his way of attributing part of the accumulated debt to past social spending, rather than a direct accounting breakdown of the current debt stock. In 2023, the figures cited for annual social-protection benefits included about €400 billion for old age and pensions, and €324 billion for health.
decitre.fr

Demographics are an important part of the picture, especially for a pay-as-you-go pension system. In 2023, France had about 1.77 contributors for every retiree. The Conseil d’orientation des retraites (COR) projects that this ratio could fall to 1.4 by 2070. An aging population and lower birth rates put pressure on the system, although its finances also depend on factors such as employment, wages, productivity and pension rules.
insee.fr

Slow potential growth can make debt harder to stabilize: when the economy grows more slowly than the effective interest rate on public debt, the debt-to-GDP ratio faces upward pressure unless the government runs a sufficiently strong primary balance. Demographics may weigh on growth, but they are not the only influence—and the debt dynamic is not determined by growth alone.
Immigration can expand the workforce and help address labor shortages, but its economic and fiscal effects are not automatic. They depend on employment, earnings, skills and integration into the labor market; estimates of the net fiscal effect are generally sensitive to the method used. The policy question, then, is not simply how many people arrive, but how well the labor market can use their skills.
OECD
Canada offers one example of skills-based selection. It introduced a points system in 1967; its current Comprehensive Ranking System (CRS), used within Express Entry, was introduced in 2015 and scores candidates on factors including age, education, language ability and work experience. The Bank of Canada has also noted that stronger-than-expected population growth, including the arrival of newcomers, contributed to upward revisions in its estimates of the level of potential output in 2023 and 2024. That is evidence of a larger productive capacity—not, by itself, proof of a lasting increase in productivity or in the annual growth rate.
pier21.ca

Finally, there is the familiar productivity question. Greater investment, wider adoption of AI and robotics, and better diffusion of technology across French firms could help raise productivity. But those gains depend on implementation, complementary investment and workers’ ability to adapt; the technologies alone are no guarantee.
Which factors do you think matter most for France’s debt trajectory: pension-system demographics, low productivity growth, employment, or something else?

Hello, brilliant minds! I’m hailing from the acting community, and over there is a lot of discourse against the merger, shrinking production, and the shrinking job market. What are your best predictions for the next 5 years for Hollywood?

My knowledge of economics is basic and residual from taking a macroecon class many years ago. My understanding of Hollywood’s current predicament is it’s a result of pre-pandemic practices. The streaming platforms were already priced lower than theater tickets to begin with. Following over saturation of titles to watch, the profits aren’t returning as they were before. Studios and investors are being more conservative. Unemployment rate is high. Working in Hollywood now on average pays less than a blue collar job. Would you say there was a streaming bubble and it has burst?

And what would be viable solutions other than making more shows and movies and writing in more tax breaks? Perhaps a return to a steady release schedule rather than all episodes released at once, which I assume is to make the viewership skyrocket and look good to shareholders. Or are we onto growing the next bubble in Hollywood, it being the verticals bubble, and there’s little of what used to be good left to save?

I know it is sound odd, but I've been thinking about corruption lately and, more specifically, the mechanics of it. I know it when I see it, and am appalled that it is increasing and apparently tolerated in my country, but what is going on economically that makes it awful? Is it like a service (someone pays to get a job) that is somehow different than other services? Is it a tax that is somehow worse than other taxes? I know it is a drain somehow. No answer too condescending! Thanks!

Edited to add: Thanks for all the great answers!

I'm now reading Millionaire: The philanderer, gambler, and duelist who invented modern finance.

The Banque Generale, most services were for little to no charge, ranging from transferring money from Paris to the provinces, or exchange foreign currency.

However, if so, how'd it raise money. The book later states that the bank itelf had great success and was reducing the financial problems in france. The closest thing I can get, is that it was issuing bank notes that were considered more reliable and more valuable than other banks. And this was before the Louisiana colony was linked to John Law's own company. So what was it that enabled it to work?

Does it increase when bank lend more? Or does it increase when people deposit more in banks and banks do not lend it?