The New York Times-20080124-Trouble in Our Economic House- -Letter-
Return to: The_New_York_Times-20080124
Trouble in Our Economic House; [Letter]
To the Editor:
Re Fed, in Surprise, Sets Big Rate Cut to Ease Markets (front page, Jan. 23):
The actions by Washington and the Federal Reserve on Tuesday are an excellent example of why the free market and the Republican and libertarian philosophy do not work.
Republicans believe in few government controls, yet the Bush administration bails out Wall Street investors every time. They say no to big government except when it affects their pocketbooks.
Robin WiederEast Rockaway, N.Y., Jan. 23, 2008
To the Editor:
Prudent economists have warned that Americans save too little and spend too much. As a nation, we've accumulated debt to maintain lavish spending styles. So what does our government do with monetary and fiscal policy in the face of the current economic crisis? Encourage more debt and spending by lowering rates and giving tax rebates. The message is clear: borrow and spend.
Savers and investors, step aside. What we really need are incentives to invest that will create new businesses and raise productivity. But that takes time, and we are too impatient. Our leaders don't have the courage to tell us what we must do: sacrifice.
Eventually, we will all pay the price for spending with money we don't have: a lower standard of living. The political consequences may be dangerous.
James P. TuthillLafayette, Calif., Jan. 23, 2008
To the Editor:
The same folks in Washington who helped give the economy its current problems have now proposed a $150 billion stimulus package to correct them.
The theory used to be that the federal government would run surpluses during the upturn of the business cycle and use them to stimulate the economy during the downturns of the cycle. Now that Washington is running continuous deficits, it will have to borrow the money to finance the stimulus. In effect it is taking money from the economy with its left hand and putting it back with its right hand.
The old theory was also based on the notion that Americans' use of the stimulus money would have a multiplier effect in the domestic economy. Now in the age of globalization, any additional consumer spending caused by the stimulus may benefit foreign economies more than the domestic one.
George MossColumbus, Ohio, Jan. 23, 2008
To the Editor:
Worries That the Good Times Were a Mirage (Economic Scene, front page, Jan. 23) states, For the past 16 years, American consumers have increased their overall spending every single quarter.
Americans have frequently been the subject of criticism for our spending versus savings habits, but can we really be blamed? Our neighborhood banks, once viewed as the solid repositories of our funds for the rainy day and a hedge against inflation, have been paying their depositors the regal amount of seven-tenths of 1 percent on savings accounts, and now are found to have been lending irresponsibly.
The mattress appears more and more to be an attractive alternative for my funds.
Robert SolomonBrooklyn, Jan. 23, 2008
To the Editor:
I applaud the Fed for slashing its benchmark interest rate in the hopes of avoiding a recession. But I doubt that the credit card companies will follow suit.
No doubt they will maintain their interest rates at 16-plus percent and use the opportunity to make record profits to enrich their chief executives and, yet again, the wealthiest people in the country.
Shara LamontAlbuquerque, Jan. 23, 2008
To the Editor:
In response to possible economic stimulus programs, some economists have raised concerns that providing $800 checks to all Americans will not provide the expected multiplier effect to the economy, as many recipients may simply deposit the proceeds or use it to pay down debt.
My wife has the ultimate comeback: Give everyone an $800 gift card. No ifs ands or buts, to get the $800, you have to buy something, anything.
Alan E. HartGreenwich, Conn., Jan. 22, 2008
To the Editor:
Paul Krugman argues in Don't Cry for Me, America (column, Jan. 18) that the solution to America's economic troubles lies in developing financial regulatory systems that take into account the current, complex realities of the United States economy. It should also take into account current social realities.
Out-of-control financial markets contribute not only to economic woes but also to social inequities.
For example, the bursting of the housing and credit bubble affects not only investors, but also, and most directly, the holders of subprime mortgages -- targeted for these loans precisely because they were already disadvantaged and thus deemed ineligible for conventional loans. Borrowers are now threatened with the loss of their homes and homelessness.
Financial regulatory systems should recognize this impact and protect basic human rights, not just business interests.
Maria FoscarinisWashington, Jan. 19, 2008
The writer is executive director of the National Law Center on Homelessness and Poverty.
[Illustration]DRAWING (DRAWING BY LEWIS SCOTT)