Wednesday, January 30th, 2008
“Fed Cuts Rate another 1/2 Point”
“The Fed’s hope is that by making credit cheaper, it will encourage more borrowing, giving the economy a needed boost.”
Tell me how the fugg that makes sense?
The “economy is in shock” due to the sub-prime mortgage crisis. Which is what happens when greedy mortgage brokers lend money to people who shouldn’t be allowed to borrow any, then those debts get sold as an investment package. Then the investment goes south and people who bought the debt that poor people owed are losing their money so all the wallstreeters are panicking.
So the Fed cut rates again. To stimulate growth by making it cheaper for banks to borrow money from other banks, and hoping the banks will lower the rate they charge when loaning out money to customers.
And since people borrowed more than they could afford and investors were stupid enough to take on these debts thinking they’d get paid back eventually but are not, now the government is making it easier to rack up debt, so we can buy crap and keep the economy growing.
“To combat the threat of a recession in an election year, the Bush administration has been negotiating with congressional leaders for an economic stimulus package of around $150 billion, focused on tax rebates for households and business tax breaks to spur investment. The House passed its version of the proposal on Tuesday but Senate action could be delayed by efforts to expand the relief to senior citizens and the unemployed.”
So after making it easier to borrow money, they divert taxes away from things we want to spend them on (like education and social services and OUR national defense) and give some of it back to us right before we have to turn around and give it back to them. Probably costing more in postal services than the “boost” will provide to the economy.
How about doing something that will actually boost the economy. Like keeping jobs in America. And refining corporate tax breaks to stimulate industry that actually needs help. Or how about a program to create a new infrastructure to support our energy needs. Imagine the number of jobs that would be created if an entire generation / distribution system based on solar/geo/bio energies was started RIGHT NOW. Sure, they’d be construction and manufacturing jobs, but the work would take decades and the resources / manpower / money would all stay here.
Unless we hire a bunch of migrant workers to do it because manual labor is beneath Americans. [/sarcasm]