The banks keep your money. They charge fees. They loan out money at a profit. Many people who are retired or nearly so have saved an amount such that 4% interest (or so) would supplement their retirement, and that interest would be money pretty much completely spent in local economies.
Now you have a model where banks can profit from your money but not have to give you part of the return. But still their executives and largest stock holders get very nice returns and bailouts if they mess up. If you don't have a large enough balance, they'll charge the saver a fee for safe-keeping of the money.
It's not a sustainable model. Older baby boomers and retirees have mostly prepared for the future. How are most younger people going to be anything but indigent when they retire?
Be careful grania, Toddsterpatriot is the resident Financial No It All. You can easily fall into his Lair. :)
There are plenty of very secure bonds that pay 4%.
But still their executives and largest stock holders get very nice returns and bailouts if they mess up.
Stock holders lost tons of money when the banks messed up. Even jerks like Dick Fuld and Jimmy Cayne lost hundreds of millions.
How are most younger people going to be anything but indigent when they retire?
The ones who can afford a house have hopefully locked in a 30 year under 4%.......
The solution to that problem is to get your money out of the bank and lend it directly to people instead. I know this sounds overly simple, but I don’t know of anything out there that prevents like-minded conservatives from pooling their money and creating some kind of lending institution or credit union to do things for themselves that banks can’t do for them.