Commercial Loans, Social Security, Economic Policy

Three topics are addressed in this research. Commercial loan pricing in California over the 1992-1995 period is analyzed within the context of the concepts of supply and demand. The implications for the commercial banking industry of the effects of population demographics on the social security system are identified. Lastly, the economic policies of the Clinton Administration are assessed from a Keynesian perspective.

Commercial Loan Pricing in California: 1992-1995

The demand for commercial loans increased dramatically in California in the second-half of 1994. Subsequently, interest rates on commercial loans in California began to rise following several years of dramatic declines. In December 1994, however, Sanwa Bank began lowering prices on commercial loans as a part of a strategy to build market share in the small business segment of the market. Neither the earlier interest rate reductions nor the current interest rate increases, however, have had any dramatic impact on the demand for commercial loans.

Bank lending to businesses soared in 1994, reflecting strong corporate demand. Bankers tied the lending surge to the need for short-term loans at floating rates as interest rates rose during the year. As rates decline, some banks will extend riskier loans to make up for lost volume. Business loans increased 8.3 percent in 1994 from 1993 levels.

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al government tumbled to the fact that the baby boom generation would one day become eligible for social security retirement benefits. When a closer look was taken, it was thought that the retirement trust funds likely would not be able to remain solvent when the baby boomers retired unless changes were made to the system. As a consequence, a new contribution structure was developed that the Reagan Administration and the Congress assured the American public would provide for the fiscal integrity of the retirement trust funds to a point at least mid-way through the twenty-first century. The new contribution structure was made to order for the Reagan Administration, because the structure increased federal revenue collections while the Administration was simultaneously telling the American public that the Reagan Administration countenanced only reduced federal revenue collections through federal tax cuts. At this stage, the Reagan Administration was fully prepared to acknowledge that payments into the social security trust funds by workers and their employers were in fact contributions that were providing funding for future benefits to the contributing workers. Almost immediately following the revision of the social security co
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Some common words found in the essay are:
Reagan Administration, Administration Requiring, Depression Near, Banking Industry, Adam Smith, US$108 Scheduled, Sanwa Bank, Security Administration, NAFTA United, Administration Congress, social security, reagan administration, commercial loans, federal government, trust funds, demand commercial loans, security program, clinton administration, demand commercial, business loans, external debt, social security program, social security trust, security trust funds, social security system,
Approximate Word count = 4011
Approximate Pages = 16 (250 words per page)

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