FDIC Calls Upon Consumers to Save and Build Wealth

FDIC Release 2/22/2010:
The Federal Deposit Insurance Corporation (FDIC) is calling upon consumers across the nation during America Saves Week to consider establishing a basic savings account or boosting existing savings. FDIC Chairman Sheila Bair said, "One fundamental lesson of the financial crisis is that savings can help families withstand sudden changes in their economic well being. Establishing a savings account in a federally insured institution is a great first step to build wealth and begin a savings habit that will last a lifetime."

The personal savings rate rose to 4.6 percent in 2009 from 2.7 percent in 2008, according to the U.S. Department of Commerce. "I am pleased to see that people are saving more of their hard-earned money and building wealth. Having personal savings for an emergency fund or saving for a future expenditure, such as a college education, can make a big difference in avoiding other costly alternatives. I've always been a big advocate of a back-to-basics approach to financial services; it's my hope that Americans' increase in savings is the beginning of a long-term trend," Bair said.

"Money saved by consumers also provides a stable source of funding for investments in the economy that benefit all Americans," said Bair. "In fact, a country with robust savings generally has more capital to fund investments and support economic growth over the long-term. As demonstrated recently, it is harmful to an economy when consumers spend beyond their means, financed by debt that they cannot afford to repay."

Grandpa:
Sheila, Sheila, Sheila, “harmful to an economy when consumers spend beyond their means, financed by debt that they cannot afford to repay." What about Wall Street? Oh, that’s different as they paid back their TARP debt. Have they also released the FDIC guaranty on the billions of bonds you backed? Speaking of DEBT, have you glanced over the Federal Deficit figures recently???

“No question building a nest egg is back to the basics and good for all. Sheila, did you neglect to check in with your peers at the Federal level? They still want people to SPEND, SPEND and SPEND a bit more. Maybe you could check in with Helicopter Ben in an effort to squeeze a higher interest rate for those of us trying to build the "nest egg".

After all, Ben has been spewing the fact that the Federal Reserve could pay banks % on their reserves. Well Sheila, if Ben and the Federal Government are willing to pay the banks, how about us?

In addition, Ben has been suppressing % rates in an effort for more people to SPEND money buying a house and government programs still enable one to purchase a home with a few percentage points of down payment. In addition, Ben's low interest rate policy is intended to enable a homeowner to refinance their existing debt so they can SPEND the difference on other items in an effort to "spur" the economy.

The government added to our grandchildren’s' debt so people could turn in that old clunker and SPEND money on a new car. This same government is expending billions to rework mortgages so people are able to SPEND the difference. Let's not forget the "clunker appliance" program as once again, the federal government does not have a problem with placing the debt burden on the same generation that is currently told “stay away from the stove”.

What is your real agenda Sheila? Grandpa has an inquiring mind.