Low interest rate poses a Catch-22 situation.
Hundreds of billions of dollars are currently being hoarded away in CDs and savings accounts across the nation. The owners of these assets are the baby boomers who, because of their age, are not in a position to gamble in the stock market. The funds in these no-interest accounts are safe but are doing nothing to help the economy.
The federal government, in an effort to save Wall Street, has in essence placed one of the greatest taxes in American history on anyone with money in the bank. Imagine what would happen if the banks were forced to pay fair interest rates. The interest income from this treasure trove would flow back into the economy almost immediately. This renewed flow if spendable cash would create demand and spur real job development.
The federal government has given the banks and Wall Street a free ride on the backs of anyone who was smart enough to save rather than gamble on the stock market.
The banks have and still are sitting on this money, refusing to use it for business and housing development as intended.
It is time to end the “no-interest tax” and get this stolen money back into the hands of people who will spend it and end the recession.