Sunday, March 30, 2014

Seniors income Declining : Low Interest Rates


This is not something new - the democrats have always thought the senior class citizen to be easy targets for cheap votes, all they have to do to get the senior vote is to lie to them about how they really, really care about the needs of seniors, and the senior fall all over themselves to believe everything that comes from Mr Obama and the progressive socialist democrats. Hey, it's always been this way, seniors always vote democrat. Democrat promise all kinds of free stuff but never deliver and the seniors don't seem to care, they still vote democrat.

The seniors voted twice for the boot of the democrats to apply more pressure on their collective necks. Are they stupid or just low information voters? Maybe they just don't care enough to understand that the democrats threaten their future with Medicare and Medicaid going broke unless something is done to fix the problem?

It seems the senior has forgotten, or maybe never knew that ObamaCare is taking more then $500 billion dollars from Medicaid over the next 10 years to pay for Obama's failed health care program. Apparently the seniors as a group don't care as they voted as a block twice for Mr Obama and his friends in the progressive socialists democrat party to bring more pain and failure their class.  Go figure!

Low Interest Rates Hurt Seniors
Source: Diana Furchtgott-Roth, "How the Fed Is Hurting Seniors," MarketWatch, March 21, 2014.

March 28, 2014

The Federal Reserve's low interest rate policy hurts older Americans, says Diana Furchtgott-Roth, director of Economics21 at the Manhattan Institute.

Federal Reserve Chairman Janet Yellen suggested that the Fed would begin raising interest rates when the taper is over. These rates need to rise. From the 1970s through the 1990s, Americans could expect a 5 percent interest rate, or even higher, to generate income from their savings for retirement. Today, that figure is not even 1 percent.
  • When the returns of saving are zero, would-be savers are instead encouraged to invest money in risky stocks and bonds. Mortgage rates are also at record lows, meaning that Americans can take on large amounts of debt.
  • Seniors are the ones disproportionately impacted by this situation. In 2012, seniors earned just under 10 percent of their income from interest, whereas Americans ages 25 to 64 earned less than 3 percent of income from interest.
  • According to a McKinsey study, households headed by Americans under the age of 45 are net debtors. These households have benefited from lower rates. Those with household heads ages 35 to 44 have gained $1,700 more in spending each year due to the rates. Those under age 35 have gained $1,500 per year.
  • Seniors, on the other hand, are losing money. Those with household heads ages 75 and above lost $2,700 per year in income, while those between ages 65 and 74 lost $1,900 per year.
A low interest rate policy also hurts the economy as a whole, discouraging lending to the United States on the global market. And when interest rates do rise, our financial system will have difficulty adjusting, as many businesses are based on these low interest rates. While abandoning a low interest rate policy will be tough at first, the entire U.S. economy will ultimately be better off.
 

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