SAVING - August 19, 2010

As a recent retiree who has a certain concern about savings for possible necessities, I find it distressing to consider the options that I see as a saver and to consider that in contrast to the options available by others more affluent and by those who are in a position to profit from the rules for lending money to the US government. For various reasons, this nation gives special benefits to those lending us money from abroad, even when that money has its origin in domestic earnings and loses its identity when shunted through the labyrinth of foreign banks and institutions. It does not seem unreasonable that our treasury should look to domestic savings as a prime source of borrowed funds, especially if that should result in economic gains for our financial situation. The middle-class saver is treated as an unwelcome supplicant when it comes to federal borrowing, while foreign companies and even nations are courted with the best rates and freedom from income taxes. Indeed there are several dimensions on which our economies would profit from the unexpected consequences if our treasury would pay private borrowers the same rates available to strangers, and as tax-free as apparently alien funds. Such a change would free us from the need to borrow as much from overseas, even not counting the fees paid to the agents that maintain the foreigner fiction for us. Also, more of the interest would be spent on domestic products, which might even help in the cause of recovery. Finally, the extension of the existing benefit to Americans might make domestic borrowing enough better so that the interest paid on that borrowing would decrease. Is it possible that this obvious result has not been seen by the supposed scientists who advise our government, or is it the case that these are again a recital of the benefits that the rich and the powerful rain on each other and that are denied to those of us who scrape by as best we can?