Money Stuff: It’s Easy to Borrow Money If You Have Money

You could have a dumb oversimplified model that goes like this:

It is just a more efficient way to extract spending money from wealth. (This model is sometimes called “buy borrow die,” because if you die in step 9, that can further improve the tax efficiency of the strategy.) It does require a change in the business model of banks, though: Instead of principally being in the business of lending money to people who don’t have money and need some, they are increasingly in the business of lending money to people who have lots of money but don’t want to liquidate financial assets.