And their touting a low inflation rate is bunk (3%)!!! If we take out the deflation in housing our rates are much higher. If we start prior to the economic crisis (2007) our inflation rate is also much higher. My discuss below shows the economy conservatively looses over 5 trillion in spending capital while inflation is really at about 8.5%. Read on my friends!
Personally, I have not heard from any candidate be they R., D., I., what the financial regulators of our nation will be doing about the artificially low interest rates in our nation.We think it is saving us $$$ but in fact we are paying for this without realizing it.
1. Yes our nation pays less on our nation debt of trillions of dollars with a lower rate. What would our electorate expect our national government leaders to do about the debt if we were really paying a reasonable rate. We would have to deal with the problem.
2. If our baby boomers are the largest population group in our nation, then it would be wise to make sure that we help them be able to survive without so much government assistance. By keeping interest rates low retired and elderly are loosing thousands of dollars a year in interest income that they had planned to live on.
3. Purchases by those living on interest income do not have the funds to place funds in the economy by purchasing items in their lives. If they are the greatest population group, then how much is our local businesses loosing because they do not have any purchasing power.
4. Interest income for schools, colleges, medical facilities, non-profits and foundations is down between .20% to .90% on CD's or CDARS. If an organization has 1 million dollars in their foundation and planned to earn say 4% then they would earn $40,000.00 in a year. But now they only earn .04% they earn $4,000.00. This means that these foundations that plan on using interest income for purchases and special projects have just lost $36,000.00 per year.
5. The National Center for Charitable Statistics has a Table Wizard that a person can enter specific data sets to get the number of non-profits registered (http://nccsdataweb.urban.org/tablewiz/tw_bmf.php). I entered on the Wizard for all non-profits that for "Total Asset Levels between 1995 to August 2011). I then looked at the results and found that there were 102,655 with over 1 to 5 million in assets. Those with assets 5 to 10 million is 22,470. The total earning from 1 million to 100 million is 160,643 organizations. Lets just multiply by 36,000.00 of purchases and earnings. That alone is a huge amount of $ being placed in our local, state and national economies. The amount if they spent only 36K per year would be $5,783,148,000.00. That is almost 5 trillion. What would that do for our local businesses and our national economy??
6. Our banks, credit unions and financial businesses are going to go broke with the low income they are making from these low rates. The businesses and homeowners in our nation do not have the income to be able to borrow funds from the banks. Keeping the rates low has not increased lending. In fact I'd argue that it is hampering their ability to make loans from the financial organizations.
7. If we allowed rates to rise normally it would begin to have people in our nation feel more confident in our financial future. If we are keeping rates artificially low it communicates that our nation is still in risk and they will just hold tight. It also keeps us from saving for our future.
8. Officials say we have an inflation rate of 3.2 % but this is misleading. However, if I enter in an Inflation Calculator (http://www.usinflationcalculator.com/), it indicates inflation up 4.5% since 2008 (if I spend $20.00 in 2008 the same item would cost $20.90). Beginning in 2007 the inflation is much higher. I am using this years figures because this is really the year prior to the huge financial crisis hit our nation. If I purchased a $20.00 item in 2007 and then I purchased the same item in 2011. the inflation is 8.5%.I would have paid $21.70 for the same item in 2011.
One financial advisor I have talked to thinks that the federal government may simply inflate prices so that the national debt will not look as big as it is. So then salaries might have to go up, prices of course go up; instead of the nation debt being taken care of. But those with no capacity to earn more will not be able to keep up, our costs will continue to sky rocket and our problem will get worse.
Let's not play games, the American public is paying for the crisis, handling of it, the low interest rates and the way our nation is handling their finances! A president alone will not solve the problem. It takes the resolve of the American people to get the Senate, House, Federal reserve and Presidential executive branch to really deal with our financial house.
National Center for Charitable Statistics has a Table Wizard
http://nccsdataweb.urban.org/tablewiz/tw_bmf.php
| Level of Total Assets | Number of Registered Organizations | Number of Organizations Filing Form 990 * | Total Revenue Reported on Form 990 * | Assets Reported on Form 990 * | ||||
|---|---|---|---|---|---|---|---|---|
| A. Less than $100,000 | 834,876 | 52.8% | 737,108 | 63.0% | 30,516,885,565 | 1.6% | 9,549,855,100 | 0.2% |
| B. $100,000-249,999 | 119,850 | 7.6% | 116,029 | 9.9% | 18,408,917,493 | 0.9% | 19,041,021,402 | 0.3% |
| C. $250,000-499,999 | 87,459 | 5.5% | 85,203 | 7.3% | 20,769,408,021 | 1.1% | 30,629,947,818 | 0.5% |
| D. $500,000-999,999 | 74,978 | 4.7% | 73,262 | 6.3% | 30,770,852,383 | 1.6% | 52,296,245,499 | 0.8% |
| E. $1-5 mil. | 102,655 | 6.5% | 100,671 | 8.6% | 140,416,784,354 | 7.2% | 224,186,905,928 | 3.5% |
| F. $5-10 mil. | 22,470 | 1.4% | 22,103 | 1.9% | 89,964,211,697 | 4.6% | 155,708,198,535 | 2.4% |
| G. $10-100 mil. | 29,674 | 1.9% | 29,166 | 2.5% | 431,067,601,297 | 22.2% | 845,674,398,690 | 13.3% |
| H. More than $100 mil. | 5,844 | 0.4% | 5,771 | 0.5% | 1,176,648,882,415 | 60.7% | 5,021,789,009,888 | 79.0% |
| Not Reported | 302,630 | 19.1% | 0 | 0.0% | 0 | 0.0% | 0 | 0.0% |
| Total | 1,580,436 | 100.0% | 1,169,313 | 100.0% | 1,938,563,543,225 | 100.0% | 6,358,875,582,860 | 100.0% |
