Fed Cuts Interest Rates to Historic Low. Bush pushes economy to brink of catastrophy.
December 17, 2008
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Regular readers of “Mugsy’s Rap Sheet” know that I’ve been ranting about Bush’s disasterous economic policies and the abject failure of Conservatism for years. In fact, the very first video I ever uploaded to YouTube was about the exploding national debt under “fiscal Conservative” George W. Bush in comparison to the shrinking debt under “tax & spend Liberal” Bill Clinton.
The clearest sign yet that the Neocons and Bush have pushed this country to the brink of economic disaster came Tuesday as the Federal Reserve took the unprecedented step of cutting interest rates to the bone in an attempt to rescue the imploding U.S. economy. National interest rates were cut from a mere 1% down to “less than 0.25%” (usually, interest rates are cut no more than 0.25% at a time. A cut of 0.5% all at once has typically… up till now… been considered an unusual and dramatic cut, often a sign that things may be worse than they appear. So when the Fed cuts rates by a full 0.75% all at once… AFTER a $700 BILLION DOLLAR BAILOUT of the financial industry no less… that’s a sign of serious trouble (not to mention demonstrating what a TREMENDOUS F-ING FAILURE Conservative economics have been).
It is difficult to summarize exactly “why” Tuesday’s rate cut is such a massive disaster… especially after the Stock Market reacted positively by jumping over 359 points upon hearing the news, but think about this: The reason we have “interest rates” at all is, not just to encourage people to put money in the bank to cut spending and ward-off inflation, but to encourage other countries to lend us money to run the Federal Government when we run a deficit because we take in less in taxes than it costs to run the country. You can’t just print all the money you need because that devalues the dollar, which creates inflation, so you need to borrow that money from another country. And they don’t loan us all that money out of the kindness of their hearts. We pay them interest. The higher the interest rate, the more willing they are to loan us the money. Cut the rate, and the less they give you. So what if they don’t give you enough to cover your expenses? Then you make up the shortfall by printing more money, which devalues the money already in circulation, spiking inflation… bad on its own but disastrous for an already struggling economy.
This will have to do for now until I have a chance to do a bit more research. Look for a more in-depth analysis of the consequences of just how spectacular this latest Bush failure truly is sometime later this week. Until then, hang tight, and take solace in the fact Bush only has 32-1/2 days left.
December 17, 2008
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Continues fluctuation of the economy give an indication that people needs support from the government. If the government cannot provide their needs, it’s wiser to choose another option to survive. The banks that got emergency cash as a part of the government bailout don’t have to follow the same rules as people who have to get payday loans. They do not have to pay the money back, or even be accountable for it. The banks and other companies that got generous portions of taxpayers’ money are popping up all over the place in reports that they are either unable or unwilling to report just how exactly they have been spending that money. (My guess is the latter.)
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