US Government Policy

Most Americans don't realize it, but not only are they being shafted by Wall Street to give money under TARP, and to bulk up the economy by supporting a trillion dollar deficit as a stimulus under Obama that means future taxes to repay the debt, there is yet another cost: low interest rates for savers.

Here's a bit from a NY Times article by Stephanie Strom on this additional way that the little guy is being screwed so that the rich and reckless can be "made whole":

Millions of Americans are paying a high price for a safe place to put their money: extremely low interest rates on savings accounts and certificates of deposit.

The elderly and others on fixed incomes have been especially hard hit. Many have seen returns on savings, C.D.’s and government bonds drop to niggling amounts recently, often costing them money once inflation, fees and taxes are considered.

...

“What the average citizen doesn’t explicitly understand is that a significant part of the government’s plan to repair the financial system and the economy is to pay savers nothing and allow damaged financial institutions to earn a nice, guaranteed spread,” said William H. Gross, co-chief investment officer of the Pacific Investment Management Company, or Pimco. “It’s capitalism, I guess, but it’s not to be applauded.”

Mr. Gross said he read his monthly portfolio statement twice because he could not believe that the line “Yield on cash” was 0.01 percent. At that rate, he said, it would take him 6,932 years to double his money.

The rich get rich, the poor get shafted. That's the story of civilization. It need not be, but it is so long as the rich can buy the government they want. They bought the Republicans and got a "de-regulated" economy that let them play "heads I win, tails you lose" with risk. Now that the Democrats are in power, they've bought the politicians to make sure that any rule changes will be favourable to them. And the sad fact is that the American people keep electing politicians who are willing to sell themselves to the highest bidder. Real, radical reform is needed in the US, but it isn't going to happen until people realize they are the patsies in this shell game rigged for the rich.