How President Obama's jobs plan may affect savings accounts
September 15, 2011
If you're not looking for a job, you may not think you have anything at stake in President Obama's new initiative to promote employment growth. However, if you have deposits in savings accounts, CDs, or money market accounts, you may have something riding on that debate after all.
The slow economy is to blame for the low level of CD, savings, and money market rates, and employment is the key to getting that economy moving again.
Critiquing the jobs proposal
President Obama's jobs proposal is wide-ranging and ambitious, which is both its strength and its weakness. It's good to see a bold proposal on the table--clearly, the economy is not going to benefit from half-measures. There are, however, some troubling aspects concerning the impact on deficit reduction. The assertion that the plan is "paid for" is the subject of some well-placed skepticism.
At the same time, Republicans can hardly claim the mantle of fiscal responsibility as long as they insist that closing loopholes and raising some taxes cannot be part of the solution. With a growing number of business leaders insisting that raising revenues must be part of a long-term budget solution, Republicans might find the constituency for their position on this to be increasingly narrow.
What would be a win for savings accounts?
Looking at this from the standpoint of depositors hoping for higher CD, savings, and money market rates, what should they hope to come out of the debate over the jobs proposal? After all, there are good and bad aspects of the proposal, and clear political divisions over it. What would be a win for depositors?
In the aftermath of the ugly end to the debt ceiling debate, which dragged down the confidence of consumers, business owners, and investors last month, perhaps the key to look for this time around is not so much any specific component of the bill, but the ability of Congress to work out a prompt and decisive solution. The longer the debate drags out, the more watered-down the solution is likely to be, and the more job-destroying uncertainty will result.
