William Thien

The FED, Interest Rates, People on Fixed Incomes, and The Cost of Living

Posted on: July 30, 2015

I was surprised to hear that once again the FED did not raise interest rates yesterday. The reasoning given was the same as it has been for the last seven years, that the FED is waiting for more indications the economy is on the mend.

I should think that unemployment being lower than prior to the real estate bubble bursting and in many places lower than five percent for some time now and that the stock markets are seeing record performance for some time should be all they need to raise rates but they keep putting it off. I think the fear is that Janet Yellen, the FED Chairman, does not want to be the bad guy who says the party is over by raising interest rates. I truly believe that is the primary motive for not raising rates. I can’t say I blame her. Who’d want that job? Yet, with interest rates as low as they have been for this long, there is a certain economic party going on in this country and not everyone is invited. Economic performance has been stellar since the age of low interest rates.

You might ask, “Why raise rates if low rates have led to such incredible economic performance?” And I might agree. But there are a number of reasons to raise rates which have nothing to do with greed.

For one, low interest rates, as low as they are today and have been for some time, such low rates dramatically stimulate inflation, particularly inflation in such areas as the housing market where what once just a few years ago would buy you a nice little house in a quiet neighborhood merely gets you a ramshackle shed by the railroad tracks with cellophane on the windows today.

When once you could purchase a new compact car for a few grand now requires twenty or more. The price of many items purchased by families has now doubled or tripled just since 2008 yet median incomes for families have been trending downward. Like I said, there is a party going on in The United States and not everyone is invited.

Now if you are seeing a corresponding increase in pay such as a commensurate cost of living increase, one that ACTUALLY CORRESPONDS with inflation, things may not seem so bad. But for the majority of Americans that is not happening and if you are on a fixed income or are not seeing a pay increase (very common), such as the elderly or military personnel for example, constant increases in inflation put a sizable dent in your way of life. You find you are using credit cards more or going without, which for some might even mean going without decent food. Have you seen the price of hamburger lately? And eggs? Supposedly there is a shortage of eggs but when I visit the market the shelves look crammed pretty well with eggs. It’s just that the price has tripled because, well, there is a shortage of those eggs crammed onto the shelves at the market.

I have written previously that another reason interest rates are being kept so low is that we reside in a political climate that forbids talk of tax increases, and rightfully so. The country has become almost entirely socialized and taxes are being blown for example on women having sex out-of-wedlock and getting pregnant to the tune of 50 plus percent. That’s right, last year more than fifty percent of babies were born to single mothers. Fifty percent! All of those women can’t raise children without the aid of the government. The country has almost been entirely socialized and women having children out-of-wedlock are a large source of the problem. I hate to to say it, but women in American are the primary drivers of socialism. All of that talk about feminine independence to come from the sixties and seventies is a bunch of hormonal malarkey. After all, women are going to have to police their own behavior. Men are not allowed to say anything about feminist collectivism. If they do, they are branded as sexist. Feminism has become a collective ball and chain clamped upon the ankle of the American taxpayer.

I call that portion of the economy the “fuck and suck economy” (you can read my entire blog by scrolling down on the right side and that particular observation will become visible). The f and S economy is huge with single women sloughing around fornicating in front of the television and buying the products proffered to them to get their government benefit payment monies. Politicians are afraid to go after that portion of the economy because the television will crucify them. Such political encroachment on one of the largest and most lucrative media markets, the daytime f and s market will kill a large portion of television revenues. It’s funny that the television media are some of the largest, most profitable corporations in America yet they always appear to be socialist when such issues arise. It’s funny strange, not funny ha-ha.

That being said, one way to increase tax revenues is to raise the price of things. When you raise the price of things, which is what happens when you stimulate inflation through low-interest rates, you get more in sales tax revenues and in the case of real estate, more property tax revenues. So, it may not be just that Janet Yellen does not want to be the bad guy and say the party is over by raising rates; stimulating inflation in this political climate may be the only way to achieve certain levels of sales tax revenue.

Nevertheless, stimulating inflation so that large, responsible segments of your own population suffer is poor policy while others reap benefits for having sex out-of-wedlock for example, particularly when such taxing maneuvers directly affect those who serve the country and those who have paid taxes through and until retirement and have controlled their sexual conduct.

I am thinking it is time to raise interest rates or provide corresponding, real cost of living increases across the board. Interest rates don’t have to go up five percent or ten percent. Have you noticed how everyone waits with bated breath for the FED to announce an increase in interest rates, even just a quarter of a percent? OMG! A quarter of a percent! Then, when the FED announces no interest rate hikes, there is a “collective” (yes, I think much of Wall Street and corporate America has become socialist lining up at the government trough and that is how I use that word “collective”) sigh of relief. Bring interest rates up a percent or two or three at the most and you may see a significant change in the price structure of most things in this country. For those on fixed incomes, it could be just what they need.

The question arises, “Which is easier, raise interest rates a bit or give everyone a cost of living increase?” I think you know the answer to that question.

I don’t mean to crash anyone’s party. Hold it, am I crashing the party? Or, who is crashing whose party? I think you know the answer to that question as well.

Copyright © William Thien 2015

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2 Responses to "The FED, Interest Rates, People on Fixed Incomes, and The Cost of Living"

“I call that portion of the economy the “fuck and suck economy” (you can read my entire blog by scrolling down on the right side and that particular observation will become visible). The f and S economy is huge with single women sloughing around fornicating in front of the television and buying the products proffered to them to get their government benefit payment monies. Politicians are afraid to go after that portion of the economy because the television will crucify them. Such political encroachment on one of the largest and most lucrative media markets, the daytime f and s market will kill a large portion of television revenues. It’s funny that the television media are some of the largest, most profitable corporations in America yet they always appear to be socialist when such issues arise. It’s funny strange, not funny ha-ha. “

That’s a good paragraph, imo; it sort-of ties together a lot of thoughts i’ve heard you point out before….. I too have wondered about the demo power and influence of the female daytime television segment; usually, i lament the taste and character of that endeavor in terms of artistic quality and merit. But i bet you’re right in that it’s also a real lobby with political power. I mean, you’ll even see those ads for govt. phones and such in that time slot’s commercial blocks

p.s.——- it’s also interesting to note that the television characters in that weekday/daytime time slot are the best-paid in tv and even film. I mean, with syndication deals, which means you can send that swilll all over the world to media markets, folks like Judge Judy make upwards of 50 million bucks per-year; i bet someone like Judge Mathis, or a lesser-known ‘people’s court’ -type show make about half that amount, which still bests most mainstream tv stars and film actors. think about it: chelsea rae, wendy williams, steve harvey —– they’re all bigtime money olks, snad daytime audiences are their bread-n-butter.

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