Historically, interest rates, are, at, or near, their, all – time, lowest levels. Many people remember, when interest paid, on savings accounts, were consistently, either 4, or 5%. Today, we consider, receiving 2%, as a better, than average, return on savings. While, it is normal for interest rates, to fluctuate, and for the Federal Reserve, to make changes, in their, inter – bank rates, these decisions, have usually been, and should be, based on the best interests of the nation, its citizen, and overall economic health! It has never been, supposed, to be, based on political advantage, but, in these unusual times, we’ve witnessed, the President, not only, requesting, and recommending, but resorting to name – calling, complaining and blaming the Fed President Powell, for not lowering their rate, quickly enough, for President Trump’s liking! While they, continue, to proclaim, their independence, we’ve witnessed, two consecutive 1/4% reduction in this rate, during a period of supposed, economic health, and well – being. With that in mind, this article will attempt to, review, examine, consider, and discuss, 5 potential, economic concerns.
1. Examine the reasons: Why are rates being lowered? What purpose, is being addressed, and why? Is it, for the overall health, and well – being of the nation, or to provide, corporate America, with a cheaper source of funding? It should not be, for anyone’s personal/ political agenda, and/ or, self – interest, but, rather, focused on national needs!
2. Know the historical responses: Historically, rates are adjusted, upward, when inflation, seems to be occurring, far too quickly. On the other hand, the purpose of lowering rates, has always been, to energize the economy. However, we are witnessing, considerable inconsistency, when President Trump, consistently declares, how great the American economy is, while, simultaneously, demanding, lower Federal Reserve interest rates!
3. Who wins, and loses?: Ask yourself, who wins and loses, by these actions. It seems, bigger corporations, which rely on debt, are the greatest beneficiaries. Also, since, our national debt, has exploded upward, because of a combination of Trump’s so – called, Tax Reform, combined with tariffs, it also means, it reduces the carrying costs, on the national debt – load! We have not witnessed this, when it comes to credit card rates, but car lending, has benefited. It also helps the President, by reducing the cost of his actions, and letting him declare, how much winning, we’ve supposedly seen!
4. What is the overall, economic plan/ policy: With this President, we often, are not certain, what any plan or policy, actually is! Our economic plans, have certainly, confused, and concerns, many economists! It is, certainly, not a conservative proposal, yet, Trump portrays himself, as a conservative!
5. Ramifications: Today’s actions, often, create, short – term, as well as longer – term, ramifications! The combination of the tax legislation (which clearly favored the wealthiest, and the largest corporations), with the build – up, of tariffs, and trade wars, threatens economic stability, and longer – term fiscal health!
Wake up, America, and demand clearer, more focused, better plans and policies, or expect future, undesirable ramifications. We should all be, Mad as hell, and not going to take it anymore!