10 May 2013

ben_bernanke

ELZABETH WARREN SUBMITS HER FIRST BILL

The interest rate on Stafford loans (federally-backed student loans ) is 3.4%. That’s much lower than the interest charged by most lenders, but there are strict eligibility requirements.

On 1 July 2013 the interest rate on Stafford loans will double to 6.8%, which will more than double the profits of lenders, since the interest compounds.

Freshman Senator Elizabeth Warren (D-MA) wants to know why the Federal Reserve can’t issue loans to students at 0.75% — the same rate the Fed charges when it lends to banks and financial institutions. (0.75% is the overnight rate, or discount rate). Why can’t the Fed help average Americans the way the Fed helps rich bankers and financers?

On 8 May 2013, Ms. Warren filed S.897, the Bank on Students Loan Fairness Act, which would require the Fed to do just that.

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(Actually the current depression was caused not just by the banks, but by politicians with their austerity. Bank frauds, Ponzi schemes, and austerity. It’s a perfect storm.)

The Bank on Students Loan Fairness Act would direct the Fed to make money available to the Education Department for one year at the discount window rate to fund federally subsidized Stafford student loans.

I’d like to see it permanent (not just one year), but the rich are already screaming that, “We can’t afford it.” (But we can afford infinite QE for Wall Street fat-cats.) Warren’s bill would reduce the wealth gap, and reduce the profits of banks, both of which are unacceptable.

While we’re at it, let’s have the Fed re-finance ALL student loans, reducing them to the 0.75% rate.

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Warren’s bill has zero co-sponsors, and was dumped in the Senate Committee on Health, Education, Labor, and Pensions, which is chaired by Tom Harkin (D-Iowa). There it will die. However it was a nice gesture.

One wonders why the Fed or any other bank should have to issue loans for college anyway. The federal government creates money on its computer keyboard, just like banks do when banks issue loans. Why can’t the federal government just give us money for tuition?

One blogger says of Warren’s bill that:

“It is a step toward the restoration not of Keynes, but of Hamilton’s vastly superior American System of Political Economy.”

WTF? Who cares whose “theory” it is? Notice how most people think in labels and buzzwords. They want social benefits as long as it’s not labeled socialism. They favor Ms. Warren’s bill as long as it’s not associated with the EVIL ONE…

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The Christian Science Monitor asks:

“Is Europe witnessing the end of the dogma of austerity?  French Finance Minister Pierre Moscovici thinks so: This week he stated it plainly on the radio. His is just the latest in a growing chorus calling for a change to Brussels’ hard-line adherence to budget cuts as the solution to Europe’s debt crisis.”

Total garbage, of course. Politicians on the Troika / German payroll are simply re-framing their lies, and devising new euphemisms.

Austerity and poverty will continue to worsen, regardless of what anyone claims, and regardless of how much the public protests.  No politician can stop it, even if he wanted to.

Unless, of course, the unthinkable happened…

freedom

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seattle_post

SURPLUS GROWS, AND WITH IT, THE DEPRESSION

From the Seattle Post-Intelligencer (no wonder they’ve nearly gone bankrupt, several times).

“The U.S. government reported a rare surplus of $113 billion for April — the largest in five years and a sign of the nation’s improving finances.”

Improving finances? The government’s deficit is our surplus, and the government’s surplus is our deficit.  So, the bigger the government surplus, the worse the depression, and the wider the gap between the 1% and 99%.

“Steady economic growth and higher tax rates have boosted the tax revenue in recent months, keeping this year’s annual budget deficit on pace to be the smallest since 2008.”

Higher taxes are austerity. Austerity worsens the depression.

“A smaller deficit is also likely to give negotiators more time to work out a deal on raising the nation’s borrowing limit.”

Nonsense.  No matter how bad the depression gets, politicians will say we need more austerity because of the NON-EXISTENT “debt crisis.”

“Through the first seven months of the budget year, the deficit was $488 billion, according to the Treasury. That’s lower than last year’s deficit of $720 billion over the same period.”

Since we are so close to a balanced budget, why not finish off the deficit and GO BIG with austerity? It will make the depression ten times as bad, but hey, economics is not a science. It is propaganda in favor of the rich.

http://www.seattlepi.com/business/article/April-surplus-of-113B-lowers-US-budget-deficit-4506183.php

ABC News says, “There’s no denying it: things are looking a little better for the economy.”

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“More money is coming into the Treasury, the government is spending less, the unemployment rate is slowly moving down, and Wall Street is doing great. “

Money that goes to the Treasury is destroyed upon receipt. And if the unemployment rate is “slowly coming down,” can you tell us where? And what kind of jobs are being created? As for Wall Street, of course the financial economy is doing great. It always does great during austerity and depressions. Part of the reason for austerity is to shift wealth and power from the real economy to the financial economy. The Fed’s QE is juicing the markets, but this only benefits the rich.

“And the cherry on top: On Thursday, the once-embattled mortgage giants Fannie Mae and Freddie Mac announced that they would return a combined $66.4 billion to the U.S. Treasury.”

Which will promptly destroy that money. (If you don’t understand why, then scroll down several posts and see the images of how money is created and destroyed on computers.)

The rest of the article is too nauseating to discuss.

http://abcnews.go.com/Politics/smaller-deficit-push-off-debt-fight/story?id=19146935

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