Rate Cuts No Help for Slumping Economy

As an economist, I hate to disagree with Alan Greenspan, but his latest rate cut (Aug. 22) looks like overkill and may hurt the economy rather than help. Rates were already low enough to encourage business and home borrowers, but the banks and others will be quick to lower investment yields to conservative investors, many of whom are retirees dependent upon interest income for their daily spending.

Greenspan should take a lesson from Japan, where near-zero interest rates have not caused that economy to come out of a long recession.

W. Earl Haberlin

La Canada

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The Fed has dropped interest rates seven times this year to try to stimulate the economy. So far the cuts haven’t worked, either for the nation or for me personally. I am a retiree, and a large share of my living expenses is derived from savings and a money market account. Every time interest rates are cut, so is my spendable income. I am now receiving considerably less to live on than I was in January. I’m sure there are millions of others in the same boat. How does reducing so much buying power help stimulate anything? And as for the tax-cut rebates, most of which haven’t found their way into circulation yet, wouldn’t it have been a lot simpler, less expensive and faster to just cut payroll withholding?

Jim Ryan

Van Nuys

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Re “White House Sees Shrinking Budget Surplus,” Aug. 23: Bush’s administration (I can’t say “President Bush” because he is merely a puppet) is taking this country to hell in a basket in record time and only now the Democrats are getting ready for a showdown? Where were they when it was time to oppose the budget? Where were they when it was time to oppose the inane tax refund?

Americans in general and Washington in particular have no long-term vision; short-term gain and immediate gratification are the only guideposts and incentives.

Stephany Yablow

Sherman Oaks