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How to Balance a CheckbookWaPo Article Sums Up the Plight of the Savers
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ON BY Ken Tumin
It has been rare to see article in the media about how the government's intervention in the financial system has affected savers. Even when PBS aired the townhall meeting with Bernanke, there was no mention about how the Fed was impacting savers and those on fixed incomes. So I'm happy to see this article from Allan Sloan in the Washington Post. The intro of the article describes the issue well:
The article describes all of the ways that the Fed and the Treasury have supressed both short-term and long-term rates. Cutting of the federal funds rate target to a historic low is just one of the many ways.
This makes me wonder if there is any lobby group for savers. I suppose AARP does some of this when it lobbies on behalf of retirees, but I don't see much focus on these issues that affect savers and those on fixed incomes. It's not only pushing the government for monetary and fiscal policy that's fair to savers, but also ensuring savers are considered in government programs. One in particular is the Series I Savings Bonds. I wonder how many in Congress know how much the Treasury has hurt the I Bond program. From setting tiny fixed rates to cutting the purchase limit by one-sixth, the Treasury has disappointed small-time savers for many years.
Thanks to the reader who mentioned this news in the bank deals hub page.
Here's the deal. The government is spending trillions to keep interest rates down to support the economy and prop up housing prices, and those low rates have inflicted collateral damage on savers' incomes. "It's a direct wealth transfer from savers and retirees to overly indebted borrowers," says Greg McBride, senior financial analyst at Bankrate.com.
The article describes all of the ways that the Fed and the Treasury have supressed both short-term and long-term rates. Cutting of the federal funds rate target to a historic low is just one of the many ways.
This makes me wonder if there is any lobby group for savers. I suppose AARP does some of this when it lobbies on behalf of retirees, but I don't see much focus on these issues that affect savers and those on fixed incomes. It's not only pushing the government for monetary and fiscal policy that's fair to savers, but also ensuring savers are considered in government programs. One in particular is the Series I Savings Bonds. I wonder how many in Congress know how much the Treasury has hurt the I Bond program. From setting tiny fixed rates to cutting the purchase limit by one-sixth, the Treasury has disappointed small-time savers for many years.
Thanks to the reader who mentioned this news in the bank deals hub page.