I am surprised that there has been so little commentary on the giant, hidden tax on savers - artificially low, government controlled interest rates. All the people who did the right thing and saved for their children and retirement are seeing near zero returns on their investments. We are told that the government is keeping interest rates down to stimulate the economy, but that does not easily square with the facts. Those low interest rates are not making low interest debt available to small businesses to finance job creating expansion. Rather, the low rates we earn on our savings are allowing banks to earn giant spreads and giant profits - and giant bonuses.
Why does the government want to do that? Remember the toxic mortgage backed securities that have largely vanished from the news? The Fed bought a huge quantity of those, but a lot are still in the hands of banks. As the mortgages default, though, the losses are being absorbed against the spreads that the banks are earning from our deposits. They take your deposits, pay you next to nothing, and lend the money out at healthy interest rates. The effect of this is that you, the responsible saver, are subsidizing the reckless gamblers at the banks. And while they pull their big bonuses from the subsidized profits on your money, you have to worry about earning enough to get by from your retirement savings.
Enough is enough. It is time for the Fed to let interest rates start to climb back up to reasonable levels. Bernanke has hinted that they might raise rates a little bit eventually, but meanwhile savers are losing $250 billion a year from artificially low rates. If they want to make cheap credit available to small business, there are more direct and effective ways to do it. Meanwhile, let the big banks and their executives suffer the consequences of their irresponsibility. I've put my money into local banks that didn't engage in the irresponsible mortgage scams. Stop draining the savings of responsible middle class individuals to cover the greed of the powerful.