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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 04, 2008
DNC: Will Thune Support McCain's Plan to Ration Veterans' Health Care?
Comtex
SIOUX FALLS, S.D., Aug 04, 2008 /PRNewswire-USNewswire via COMTEX/ ----The following is being issued by the Democratic National Committee:
(Logo: http://www.newscom.com/cgi-bin/prnh/20080519/DNCLOGO )
Candidate John McCain's visit to the Sturgis Motorcycle Rally today could generate some unwelcome questions for South Dakota Senator and potential running mate John Thune.
Barely two weeks after McCain suggested he supports rationing veteran's health care, McCain will participate in a Tribute to American Veterans and Active Duty Servicemen at the Buffalo Chip Campground. As retired Army General Robert Gard has noted, McCain's proposal to concentrate health care on the combat wounded would shortchange those veterans who suffer from non-combat related conditions.
Thune might also be forced to defend McCain's other problems on veterans' issues, too. McCain has voted against veterans' health care needs 29 times -- including one vote just two days after the US invaded Iraq. McCain joined the Bush administration in resisting efforts to pass a 21st Century GI Bill that he thought was "too generous" to the brave men and women who signed up to serve in our armed forces after September 11, then tried to claim credit for it after it passed. No wonder McCain got a paltry 20 percent rating from the Disabled Veterans of America and a "D" rating from Iraq and Afghanistan Veterans for America. [Palm Beach Post, 8/3/08]
S.D. Democratic Party Chair Jack Billion issued the following statement:
"Since Senator Thune is rumored to be on John McCain's short list of potential running mates, he should tell America's veterans whether he supports John McCain's ideas about rationing the health care we provide to the brave men and women who served our country. We all respect John McCain's service to our country, but his out of touch ideas about rationing health care, his double talk on the GI bill, and his 29 votes against veterans' health benefits suggest that McCain is promising four more years of President Bush's empty rhetoric on veterans issues. America's veterans expect and deserve change, not more of the same meaningless lip service from Republicans like John McCain."
MCCAIN SUGGESTED RATIONING VETERANS HEALTH CARE:
Army Times: McCain Suggests Rationing Veterans Health Care. Republican presidential candidate Sen. John McCain appeared Tuesday to suggest rationing of veterans' health care may be needed so combat veterans can receive the care they deserve.[Army Times, 7/23/08]
McCain: "We Need To Concentrate Our Efforts To Handle Those Wounds And Disabilities That Are Directly The Result Of Combat." During a town hall meeting in Rochester, New Hampshire, McCain spoke about healthcare for veterans and said, "So here's my idea, and it's not originated with me, but I've consulted with so many others who are here. Look, we need to concentrate our efforts to handle those wounds and those disabilities that are directly the result of combat. We need to expand our ability to treat PTSD. PTSD is going to be tough in this war, you know that. And we need to treat the combat wounds. We need to increase that ability to do so." [CNN Live Feed, Town Hall (Rochester, NH), 7/22/08]
Lt. Gen. Robert Gard Jr. (USA, Retired): McCain's Idea Would Shortchange Other Combat Veterans. "These wars are the first to be waged in large numbers by a new generation of brave women -- but 15 percent of our women soldiers that served on the front lines who walk into a VA facility screen positive for military sexual trauma. Is Senator McCain suggesting that we can't afford to give them benefits? Senator McCain's campaign did not return calls for comment about his statement, but these are questions he must answer. All veterans respect John McCain's service -- if he too respects ours, he should not be suggesting that we shortchange our soldiers with non-combat injuries who have served with such honor and dignity." [Huffington Post, 7/24/08]
MCCAIN TRIED TO WATER DOWN THE 21st CENTURY GI BILL:
Bush and McCain Opposed GI Bill, Then Tried to Take Credit. "The Bush administration, and Sen. John McCain for that matter, initially opposed passage of the legislation, which was supported overwhelmingly by both Democrats and Republicans. McCain, campaigning last week, used language suggesting he supported the bill. In fact, McCain did not even cast a vote on the final measure. For Bush and McCain to try to claim credit now for a bipartisan effort they both opposed is a plain attempt to hoodwink the American voter." [Las Vegas Sun, 7/3/08]
Bipartisan GI Bill Covers The Full Cost Of Attending Public University; Under Alternative Offered By McCain, Vets Must Serve For 12 Years To Receive $2,000/Month. "Under the Webb bill, veterans would receive maximum educational benefits after 36 months of service and those benefits would be tied to the full cost of public school tuition and expenses in the veteran's home state. The Graham bill would require 12 years of service to garner a maximum benefit of $2000 per month, with increases in that figure tied to the consumer price index. Critics point out that the CPI has been steadily outpaced by tuition increases." [CQ Today, 5/14/2008]
McCain Admitted His Plan Was Designed To Keep Troops Serving Longer. "My proposal and others, Senator Graham, Senator Burn, is we'll place incentives for people to stay in the military." When O'Reilly said, "So the longer you stay, the more you get" McCain responded, "Yes, the more you get, because we want people to stay in.. We have to increase the benefits for the men and women who are serving and motivate those to serve." [Fox News Transcript, "The O'Reilly Factor," 5/8/08]
MCCAIN PUT TAX CUTS FOR THE RICH AHEAD OF VETERANS BENEFITS:
McCain Has Voted 29 Times Against Veterans' Health Care Needs. [HR 4939, Vote #111, 5/4/06][HR 4939, Vote #98, 4/26/06][SCR 83, Vote #70, 3/16/06][SCR 83, Vote #67, 3/16/06][SCR 83, Vote #63, 3/16/06][SCR 83, Vote #41, 3/14/06][HR 4297, Vote #15, 2/13/06][HR 4297, Vote #7, 2/2/06][S 2020, Vote #343, 11/17/05][HR 2863, Vote #251, 10/5/05][HR 2528, Vote #242, 9/22/05][HR 2361, Vote # 165, 6/29/05; HR 2361, Vote # 166, 6/29/05; HR 2361, Vote # 168, 6/29/05][HR 1268, Vote #90, 4/12/05][HR 1268, Vote #89, 4/12/05][SCR 95, Vote #40, 3/10/04][S 1689, Vote #379, 10/14/03][SCR 23, Vote #81, 3/25/03][S 2168, Vote #185, 7/7/98][S 936, Vote #168, 7/10/97][HR 3666, Vote #276, 9/5/96][HR 3666, Vote # 275, 9/5/96][HR 2099, Vote #466, 9/27/95[HR 4624, Vote #256, 8/4/94][HR 1335, Vote #97, 4/1/93][S 2884, Vote #226, 8/4/90][HR 2519, Vote #132, 7/17/91]
2006: McCain Voted Against Adding $1.5 Billion In Funding For Mental Health Services For Veterans By Ending Some Corporate Tax Breaks. In 2006, McCain voted against adding $1.5 billion to pay for veterans mental health care, readjustment counseling, rehabilitative care, and lowering fees for veterans. The funding would have been paid for by closing corporate tax loopholes. [2006 Senate Vote #41, 3/14/2006]
2005: McCain Voted Against At Least $500 Million For Vets Mental Health Services To Keep Tax Cuts For Millionaires. In 2005, McCain voted against an amendment to authorize $500 million a year for veterans' mental health, to be offset by deferring tax cuts for those making at least $1 million a year. [2005 Senate Vote #343, 11/17/2005]
SOURCE Democratic National Committee
http://www.democrats.org
Copyright (C) 2008 PR Newswire. All rights reserved
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