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.
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Corporate capitalism is based on debt, and excessive usury.
ReplyDeleteThe credit rating down grade will happen no matter what happens.
Their real deep down concern is that the U.S. will lose their status as the global reserve currency.
TICK TOCK.
Leaders on both sides of the aisle are saboteurs of society.
And they should be treated as such.
RZ, That's right, and capitalism is sitting on trillions of dollars that they would love to loan out at usury rates.
ReplyDeleteThanks to the American taxpayer, they are whole and sitting on tons of cash.
ReplyDeleteHigher interest rates means more profit for them.They will wait it out.
RZ can you stop saying tick tock?? LOL! Well Boner is fucked, he can't move the teabaggers, now what?? The 14th amendment?? It's gonna be a very fun weekend!
ReplyDeleteI think that Lawrence O'Donnell's prediction is probably the most plausible one. There won't be any sort of grand deal and the Congress will end up passing the typical one page raising the debt-ceiling proposal. The tea partiers will vote against it (saving face) and the rest of the Congress will pass it (knowing full well that we have to raise the debt-ceiling)....And we will have had all of this drama for nothing.
ReplyDeleteWill,
ReplyDeleteYou may be right, but it will not be for nothing. I think it provides lots of fodder for the 2012 election...after all, that's what this whole thing has been about.
This whole "debt ceiling" thing is an entirely manufactured crisis. While the politicians and the media are weeping and wailing about the debt ceiling and supposedly defaulting on our loans if we don't raise it, the country is distracted from a hundred other things. Things like the two (or is it three) wars that are still ongoing. Taxing the rich. (They want us to go back to the spending levels of the sixties but I bet they don't want to go back to the tax schedules from the sixties where the rich and corporations paid a lot higher rate.)The bailout that did not succeed in that it did not cause the banks to start lending money again. The utter lack of any actual jobs creation program. (Just some tweaking here and there, all benefiting corporations more than actual people.) And on and on and on.
ReplyDeleteBy even entering into this debate and treating this insane rhetoric as if it had any merit at all, Obama has already pre-pre-pre-caved to the Republicans. I voted for Barack Obama so he could fight the Republicans, not start making their arguments for them!
"Interest rates on savings will go up."
ReplyDeleteI doubt it. Interest on savings goes up when capital is in demand. It's not in much demand and hasn't been for three years or more. Interest rates on savings are at record lows, as are the overnight rates the Fed charges and banks charge each other. They have even gone negative.
I think we would need as much as a year and a half of economic growth above 3.5 percent, with unemployment dropping below 7 percent and continuing to drop before interest on savings would budge upward.
FWIW, Randi Rhodes said today, based on things in the Wall St. Journal and that she's heard, that corporate America is highly upset that the tea bagger lunatics it backed last fall really are as crazy and uncontrollable as any idiot could see they were from the start. Rhodes said Big Money expected the tea baggers would run for office as something new and different so they wouldn't have to answer for the Bush administration's record. But, once elected, Big Money expected they would fall in line and behave like lockstep-marching congressional Republicans. They're now supposedly aghast at what they will have brought on themselves if the economy tanks again.
Obama did clearly state in his speech on Monday that the government is Dysfunctional. (that one word states it all plainly to me). It's a bunch of insane 'egos' trying to feel they have 'worth' when they are just all fear-based and being unconscious. Sad state of humanity.
ReplyDeleteMost Wall Street CEOs and the US Chamber of Commerce have been saying -- publicly at least -- that it's crucial not to default. But who knows what they're saying in private. Like your post said, a financial meltdown won't affect them; and that's all that matters.
ReplyDeleteNo Maybes about it. Billionaire Hedge Fund Managers want a default, "I think technical default would be horrible," Stan Druckenmiller said, "but I don't think it's going to be the end of the world. It's not going to be catastrophic. What's going to be catastrophic is if we don't solve the real problem."
ReplyDeleteThe Real Problem...
That equals all those welfare queens getting Pell Grants and Medicaid.
Druckenmiller and his ilk see this as a time to destroy Social Programs and Regulations. Even if it means he loses a few thousand, or hundreds of thousands he knows the next or future government will pay him.