Real Texas Freedom

Friday, August 31, 2007

USA Today Column on the Federal Reserve

This article in USA Today this morning had only 2 comments. The Federal Reserve is the most important part of the American Economy. Either readers don't care or they don't understand!!!!!

I still think the printed money should be deposited instead of given to the private banks. There are many ways to fight inflation without using recessions and depressions. Cheap labor helps no one except the financial world and that is temporary.

Real Texas Freedom -
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barbara deheus wrote: 14h 43m ago
The more money consumers borrow, the bigger the debt... Unfortunately, consumers are borrowing more than they can pay back. Are we headed for another recession or an all out depression? The consumers are the ones who should benefit from any influx of cash to the system but the real beneficiaries are the bankers who charge the interest on the loans and when people get stuck with variable rate mortgages, they end up the losers.
My Comment
The question was, "Who benefits?" Since the printed money (by the government) goes to the Federal Reserve, banks and the financial world in general benefits. Consumers benefit only by having more money to borrow. Even the government borrows from the Fed, even though the government (the people?). gave the printed money to the Fed to begin with. If the consumers could spend without going into debt, the economy would be in a lot better shape. Financial world numbers don't make sense to the man who has lost his job and can't pay his bills, no matter what the numbers say about how good the economy is. Without consumer purchasing power, businesses will lose after consumers quit buying and stocks will be worthless. There is currently no balance in the system and supply side economics is self defeating. Your investment won't pay off if consumers don't have spending money.


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