Austin Hill
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Are U.S. federal government policy makers planning for an economic meltdown? Fiscal and financial news isn’t a particularly sexy topic for broad audiences, even under normal circumstances. And over the Thanksgiving national holiday weekend, about the only news people care to consume are football scores.

But as we enjoyed turkey dinners, shopping, and hopefully some quality time with friends and family – and even in the recent days leading up to the holiday weekend – some major policy ideas and changes have emerged that could keep you away from your personal finances in the face of another meltdown. Americans are rightly angered right now by the disastrous impacts of the Obamacare implementation, but consider what else may lie ahead for our lives, our households, and our livelihoods.

For one, there was the November 25th report in the Financial Times indicating that the U.S. Federal Reserve is considering the possibility of arbitrarily cutting the amount of interest it pays on money that it borrows from private commercial banks. The interest that the government pays when it borrows money from private banks is, understandably, a big revenue stream for those banks. If the Federal Reserve makes this move, banks say they will in turn need to make up for the lost revenue by charging private individuals, households and businesses for depositing money in their accounts.

Let’s be clear about what is under consideration here. Customarily when an individual or an organization puts its money in a bank account, the bank will pay their customer at least some nominal level of interest in exchange for the privilege of possessing the customer’s money for a period of time. In the scenario that the Financial Times reported, some banks would completely reverse this historic bank-customer relationship and charge private individuals and businesses for the privilege of “parking” their money in an account for a time.

Could that create a bit of a backlash against banks? Recall that in March of this year, the dreadfully overspent government of Cyprus arbitrarily chose to impose a tax on all private bank deposits as a means of feeding the government’s never-ending hunger for money. This created a “run” on banks with private citizens rushing to clear out their accounts, which in turn led the government to force private banks to close for about ten days. When the banks re-opened, citizens were only permitted to withdrawal about $383 of their own money each day – a quick-fix that Nobel laureate economist Christopher Pissarides said was “extremely unfair to the little guy.”

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Austin Hill

Austin Hill is an Author, Consultant, and Host of "Austin Hill's Big World of Small Business," a syndicated talk show about small business ownership and entrepreneurship. He is Co-Author of the new release "The Virtues Of Capitalism: A Moral Case For Free Markets." , Author of "White House Confidential: The Little Book Of Weird Presidential History," and a frequent guest host for Washington, DC's 105.9 WMAL Talk Radio.