Lowered Interest Rates Won’t Help Economy

The Federal Reserve, with its dangerous policy of cutting interest rates to near zero (June 26), may well cost President Bush the next election. The interest rate cuts now are the equivalent of a tax increase to millions of people who rely on income from savings for their everyday spending. Lower mortgage rates offset this a little, but financial institutions gain the most. The economy is not going to improve by lowering interest rates, especially in California, where taxes are going up; whatever the helpful impact of the recent federal cuts will be more than offset. And if California, the nation’s largest economy, is in a recession, you can bet so will be the nation, and the Democrats, if they have a decent candidate, may very well win.

W. Earl Haberlin

La Canada

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The IRS has informed us that the rich have gotten richer these past eight years (June 26). Now, the Federal Reserve cuts the interest rate a quarter-point. The next thing we know the Fed will pay corporations and the rich to borrow money. This will enable corporations to downsize, lay off workers and pay their CEOs obscene bonuses. The rich can then buy another vacation home, plane, boat and his-and-her Rolls-Royces. We who save money for our retirement are left to sing the old swan song.

Valerie Nixon

Studio City