Get unlimited digital access to baltimoresun.com. $0.99 for 4 weeks.
News Opinion Readers Respond

Low interest rates have hurt retirees

A lifelong Democrat, I now find myself taking issue with the Obama administration in general and Federal Reserve Chairman Ben Bernanke in particular as it pertains to current Fed policy. What seemed to have been a good idea at the onset, to keep interest rates low to stimulate the economy, has been counterproductive and harmful to many of us who need help the most, the retired, the elderly and the poor. The funds this group depends on come mostly from savings. This was the way many of us were directed over time by the prevailing wisdom on how to prepare for the future. The future is here but any growth we anticipated in our savings has all but disappeared.

On the other hand, the banks, major corporation, investment firms to mention a few have benefited greatly from the low interest rates. The cost of capital has never been so cheap and these firms have been quick to gather it up. The idea was to use this cheap capital and reinvest in the economy and get people back to work. But to a great extent that did not happen. These big borrowers are now sitting on large amounts of cash, not investing and certainly not rehiring to pre-downturn levels. Our growth is under 2 percent a year, hardly robust enough to regain our footing.

It is my belief that if the Fed rates were raised, the gains made by those who depend on savings and other rate-sensitive investments would be spent on the economy and add a needed boost, which corporate American seems unwilling or unable to provide.

Robert M. McDonough, Columbia

  • Text NEWS to 70701 to get Baltimore Sun local news text alerts
  • Copyright © 2015, The Baltimore Sun
    Related Content
    • Free community college is a bad idea
      Free community college is a bad idea

      Free community college is another poorly thought idea from President Barack Obama ("Obama turns populist in State of the Union speech," Jan. 21). Am I against opening up the opportunity for many who cannot afford college? Absolutely not, but here is my concern. We already require K-12 education...

    • It's not the size of the government that's the problem
      It's not the size of the government that's the problem

      Some believe the central political issue of our era is the size of the government. They're wrong. The central issue is whom the government is for.

    • If the economy isn't as rosy as it should be, blame the GOP [Letter]
      If the economy isn't as rosy as it should be, blame the GOP [Letter]

      Commentator Peter Morici's recent column on President Barack Obama's job numbers is a real flight of fancy ("The economy under Obama is not as rosy as numbers suggest," Oct. 7).

    • How Republicans are ruining America
      How Republicans are ruining America

      On the national level, the cost of citizens not voting is quickly becoming apparent. Economically, the seeds of the next recession have been sown by the Republican weakening of financial controls so once again the greedy of Wall Street can gamble on dangerous financial derivatives with...

    • Regulate the banks
      Regulate the banks

      Dan Rodricks' recent column attributing amnesia to our Congress and president for dispensing with the requirement that big banks refrain from making risky investments with taxpayers' deposits was right on target ("For too many in Washington, a phantom recession," Dec. 21).

    • Milking the rich is not a solution
      Milking the rich is not a solution

      I was saddened and disappointed to read The Sun's editorial regarding President Barack Obama's State of the Union address ("Mr. Obama's tax plan," Jan. 21).

    • Mr. Obama's tax plan
      Mr. Obama's tax plan

      It's a pretty safe bet that Congress is not going to react to President Barack Obama's State of the Union address by immediately turning around and agreeing to his priorities like free community college and mandatory sick leave. When was the last time any presidential initiative got that kind...

    • Obama's middle class 'help' is useless
      Obama's middle class 'help' is useless

      All we hear from President Barack Obama is that he is for the middle class. Well, I consider myself middle class. I am a retired homeowner, so let's see how this pans out for me.

    Comments
    Loading