Monday, November 10, 2008

Redneck Fix for the US Economy - Part I

Dear Fed: For the sake of our kids, please raise the US interest rates at least to a point consistent with the growth of the world economy. It'll sound bass-awkards the first time you say it, but it is required for stability. As stated by Ted Turner this morning on Good Morning America, the American people have been overspending and going into debt for a long time. Eventually it catches up with you. He didn't offer a solution, only identification of the problem. With the problem identified however, you can figure out incentives to fix it. Whala! Raise interest rates annually until they are back where they should be. Our interest rates have been set artificially low to encourage spending. What's worse is that it forces people to invest in a broken Wall Street in order to gain any semblance of a return on their savings. In other words, every incentive is to be deeply in debt and highly invested in the stock market. An interest rate which reflects the true growth of the economy will help stabilize our markets because some people will "invest" in banks by saving while others will seek the riskier rewards of Wall Street. It might even prevent the need to give some overpaid executives the $700+ billion most of us have to work for.

Anyone have Bernanke's (or Greenspan's) number?

Next time we'll address how to fix Wall Street.