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We like to think that when we deposit a dollar at the bank, it goes into a big vault and we can pull out that same dollar at any time. But that¿s not how the U.S. banking system works. Banks take that money and invest it to make money themselves, so cash gets spread around. This, naturally, leads to a big risk: What happens if those investments go sour? Well, you¿d be out of luck. You can¿t get your dollar back.
The Federal Reserve doesn¿t like that scenario, so it prohibits banks from putting all the cash it has on deposit on the line. In fact, the Fed forces banks to keep a portion of their assets at the Federal Reserve itself, to make sure that some of your assets won¿t get squandered if the bank¿s bets go south. These are called ¿reserves,¿ (hence, Federal Reserve. Got it? Good), and usually amount to 10% of the total cash kept in checking accounts.
These reserves are never exactly 10%, and banks like to keep a little extra in reserve ¿ not, as you might think, to make you more comfortable that they¿re in good financial shape, but rather so they can take that excess and lend it to other banks and make money off it. (They¿re banks, they can¿t help themselves.) The rate at which they make these loans is called the Federal Funds rate, which is set by the Federal Reserve¿s Federal Open Market Committee.
When you hear people chattering about how the Fed cut or hiked interest rates, this is what they¿re talking about: the interest rate banks can charge for lending money from their reserves. This begs the question: If these are essentially loans between banks, why is the Fed Funds rate so important for the rest of the economy?
Well, simply put, because loans make the financial world go round. Bank A lends Bank B $10,000 at a Fed Funds rate of 5%. Bank B then lends out $10,000 to a small business at 7%. The small business then takes that money and expands the business and hires new workers. Now someone is employed, Bank B has made interest off the loan, and Bank A is the richer for making it all happen. It¿s perhaps overly simplistic, but you get the idea. When you want the economy to thrive, you make lending cheaper.
Of course, sometimes you don¿t want the economy to thrive. In fact, you might want it to cool down, mostly to avoid money flooding the system and causing inflation. In that case, the Fed raises interest rates, making it difficult to lend or borrow.
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Monday, August 18, 2008
California Supreme Court Ruling Threatens Medical Care and Religious Freedom, Says Americans United for Life
Comtex
CHICAGO, Aug 18, 2008 /PRNewswire-USNewswire via COMTEX/ ----The California Supreme Court today ruled that patient demand for nonessential, elective care trumps the freedom of conscience of physicians and their ability to practice medicine in accordance with their religious or moral beliefs.
Denise Burke, Vice President & Legal Director of Americans United for Life (AUL), said, "This ruling will deny physicians and other professionals the ability to freely exercise their religious convictions."
Added Burke, "By forcing healthcare professionals to choose between conscience and career, we will lose doctors, nurses, and other healthcare professionals who are already in short supply."
Charmaine Yoest, Ph.D., President and CEO of AUL added, "Medical experts already project that existing shortages of nurses, physicians, and pharmacists will soon worsen, failing to meet future healthcare needs. Legal action to compel healthcare providers to participate in procedures to which they conscientiously object threatens to make the already dangerous situation disastrous."
Mailee Smith, AUL Staff Counsel, said, "It defies common sense that a patient would want a doctor to violate his or her conscience in practicing medicine. A diminished physician population is not good for medical care."
The case -- North Coast Women's Care Medical Group v. Superior Court of San Diego County (Benitez) - involves a situation where artificial insemination was not provided due to the marital status of the patient (Ms. Benitez).
Ms. Benitez filed suit arguing that she was not provided the procedure because she is a lesbian. However, the physicians testified that the real issue was her marital status, and that they would not have provided artificial insemination to any single woman.
Ultimately, Ms. Benitez received the procedure from another physician after receiving a referral from the objecting physicians (who paid the additional costs she incurred).
AUL filed an amicus brief in the California Supreme Court on behalf of the Christian Medical & Dental Associations, the American Association of Pro-Life Obstetricians and Gynecologists, and Physicians for Life, arguing that federal and state law as well as the ethics standards of major medical organizations support the physicians' right to conscientiously object to performing certain nonessential, elective medical procedures that conflict with physicians' religious and moral beliefs.
About Americans United for Life
Americans United for Life (AUL) is a nonprofit, public-interest law and policy organization whose vision is a nation in which every human being is welcomed in life and protected in law. The first national pro-life organization in America, AUL has been committed to defending human life through vigorous judicial, legislative, and educational efforts at both the federal and state levels since 1971. The Wall Street Journal has profiled AUL, and PBS's Frontline program chronicled AUL's successful efforts in Mississippi.
Website: http://www.AUL.org
Blog: http://Blog.AUL.org
SOURCE Americans United For Life
http://Blog.AUL.org
Copyright (C) 2008 PR Newswire. All rights reserved
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