Tuesday, December 16, 2008
Federal debt may near Americans' net worth; Federal Reserve slashes interest rates almost to zero
Jon Ward has a cover story on the Tuesday Dec. 16 Washington Times “Federal liabilities soar 25% in 2008; $1 trillion debt excludes bailout”, link here. One major source is an unexpected increase in veterans benefits liabilities. The total debt in unfunded liabilities and entitlements approaches the total net worth of all Americans, and could eventually lead to enormous political pressure to reduce benefits, even like social security, to existing beneficiaries and throw them back on blood families.
Add to this today was the announcement from the Federal Open Market Committee to set up a target rate for federal funds from 0 to ¼ percent. The Federal Reserve press release is here. What’s left to throw into the pot now? Mad Money's Jim Cramer calls Bernanke "Santa Claus".
Will CD's even be available now? Or will we have to take risks?