Thursday, July 28, 2011
Just A Thought On Default
Increasing interest rates means that money will cost more. For example, the interest that the US pays on its debt will increase. Oh wait, big corporations and the wealthy don't pay for that. After all, their tax burdens are at historic lows.
Interest rates on loans will go up. Oh wait. Big corporations and the wealthy are sitting on trillions of dollars of cash. They don't need loans.
Interest rates on credit cards will go up. Oh wait. Big corporations and the wealthy are sitting on trillions of dollars of cash. They don't need credit cards.
Interest rates on home mortgages will go up. Oh wait. Big corporations and the wealthy are sitting on trillions of dollars of cash. They don't need home mortgages.
Well, what about the banks. Interest rates on savings will go up. They will have to pay more. You can bet that the interest they collect on loans they give out will increase much more than the interest they have to pay out to savers. Hell, they will probably lose savers, but then again, they are sitting on tons of money, money they have yet to loan out, possibly because the interest rates are so low.
So, who does get hurt when interest rates go up? Well, only people who need loans, only people who have credit cards, and only people who have home mortgages. You and me, the average American.
So, why haven't we heard a big outcry from big corporations and the wealthy? Maybe they are looking forward to it. Maybe they see it as another opportunity to transfer wealth from the bottom and middle to the top.
Maybe it is part of the plan.