Help for Bank Rates Lies Beyond Party Politics

The abrupt resignation of Senator Evan Bayh was intended to be a wake-up call for Washington to get its act in order -- or for voters to change the cast of characters in Washington.

You don't have to be a supporter of either party to agree that the federal government needs to snap out of its current pattern. With serious fiscal issues at stake, both parties are playing "chicken" in an attempt to get the other side to propose unpopular measures first.

At stake? Just the country's economic future, the stability of the financial system, and the value of the dollar. Those affect every American to one extent or another, but bank depositors may have more at stake than most.

Already, bank depositors have paid more than their share of the burden for country's financial woes in the form of low CD rates, money market rates, and savings account rates. Don't look for bank rates to sustain a meaningful rise until the economy is on sounder footing. Meanwhile, if the banking system repeats the mistakes of the last decade, deposits may become jeopardized beyond the power of the FDIC to remedy. As for the value of the dollar, rising debt could devalue the dollar and bring inflation -- and already, inflation is higher than most bank rates.

Many experts agree that what's called for here is a prescription of spending cuts and tax increases to get the deficit under control. However, Democrats want to force Republicans to propose spending cuts so they'll look heartless. Republicans want Democrats to do the dirty work on raising taxes so they'll look profligate.

You've heard that Nero fiddled while Rome burned? The modern version is the country drowning in debt while its leaders print bumper-stickers.

Showing 1 comment | Add your comment