Fed on hold - ABOUT TIME!

Well the Federal Reserve Commission did what was probably the smartest thing they could in the past year: they STOPPED raising interest rates!

Every quarter for the past 17 quarters, the Fed has raised interest rates ¼ of a percent. Now originally this was done because the Fed had slashed rates down to almost zero to try to offset the inevitable recession of 2001. (A recession that I WARNED people was going to happen, but nobody listen to me!) Then, once the economy started picking up again, the Fed began its rate increase ever so slowly to not ruin the recovery.

But for the past year, the Federal Reserve Commission has noticed some serious problems with the economy. Energy costs have been skyrocketing… wasteful spending is up… debt is up… big companies are announcing layoffs… all of the indicators that a pending recession or depression are starting to fall into place. And what did Alan Greenspan, the longtime Federal Reserve Chairman, do? He went before Congress and WARNED them about it, but then continued to raise rates. The Fed basically continued to feed the very problem that they were warning about!

Well now the Fed has decided to let the rates stand. They feel that the economy has “slowed down enough” to keep the rates as they are.

Well it’s ABOUT FRIGGING TIME!

Listen, folks, we’ve got some serious problems with the economy, and they’re not going to go away quickly. High energy costs eat into the overhead costs of business. Those big layoffs announced by companies won’t kick in for a couple of years. Then combine those things with the expiring tax cuts – which Congress refuses to make permanent – and you have a recipe for another serious economic problem starting around 2008.

The Fed shouldn’t worry about the slowing of growth, because it was ALREADY happening! The economy needs time to sit still for a while and try to gain some ground, because it was being bled to death by the double-shot of energy costs and interest rate hikes.

The Fed needs to take some time off. Leave rates alone for the next six months or so and let consumers try to hold their ground. It’s not going to hold off the coming economic problems, but it will help consumers get some footing when it DOES happen.

Now, do you know what WILL fix the problem? Enacting the Fair Tax!