Student Loan Rates Go Up on Saturday - more to follow.

The Federal Open Market Committee (FOMC) of the Federal Reserve System makes key decisions about interest rates which control the growth of the United States money supply.

Money and water follow similar laws. Water flows down to the lowest point. Money flows up to the highest return. When the FOMC lowers rates the money supply expands as money flows from Treasury bonds, bills and notes seeking higher rates from other investments. When FOMC raises rates, the US money supply shrinks as fund flow from those other investments back into the Fed to purchase Treasury bonds, bills and notes.  

When FOMC raises rates it affects many things in the private sector -- interest rates on everything from car loans, home mortgages, business loans, student loans, etc. will rise. Interest rates on government securities will also rise, meaning that the federal government will have increased borrowing costs, which means the interest citizens are paying on the national debt will increase too. And many other debt instruments including bonds issued by cities, states, school districts, etc. will have rates going up and citizens having to pay more.

The Federal Reserve raised short-term interest rates by a quarter point at the last meeting of the on Wednesday. It's the Fed's third rate hike since December. On Saturday, July 1, interest rates will rise on new student loans for undergraduates from 3.76 to 4.45 percent. Graduate students aren't spared: Their rates go from 5.31 to 6 percent. Rates were set based on the Treasury Department's May 10 auction of 10-year notes. 

The Federal Open Market Committee (FOMC) of the Federal Reserve System makes key decisions about interest rates which control the growth of the United States money supply.

Money and water follow similar laws. Water flows down to the lowest point. Money flows up to the highest return. When the FOMC lowers rates the money supply expands as money flows from Treasury bonds, bills and notes seeking higher rates from other investments. When FOMC raises rates, the US money supply shrinks as fund flow from those other investments back into the Fed to purchase Treasury bonds, bills and notes.  

When FOMC raises rates it affects many things in the private sector -- interest rates on everything from car loans, home mortgages, business loans, student loans, etc. will rise. Interest rates on government securities will also rise, meaning that the federal government will have increased borrowing costs, which means the interest citizens are paying on the national debt will increase too. And many other debt instruments including bonds issued by cities, states, school districts, etc. will have rates going up and citizens having to pay more.

The Federal Reserve raised short-term interest rates by a quarter point at the last meeting of the on Wednesday. It's the Fed's third rate hike since December. On Saturday, July 1, interest rates will rise on new student loans for undergraduates from 3.76 to 4.45 percent. Graduate students aren't spared: Their rates go from 5.31 to 6 percent. Rates were set based on the Treasury Department's May 10 auction of 10-year notes.

The US Constitution Article I. Section 8 states that one of the “Powers of Congress” is “To coin Money, regulate the Value thereof . . .” The Federal Reserve is a private corporation owned by banks. Maybe now would be a good time, for all of the folks being saddled with paying the increased cost created by those unelected people raising interest rates, to consider becoming more involved in learning how to use the power that Citizens have to change things like this. What do you think?

More Government! Less Government! Either Way, We Need TOV!

I recently read an article taken from a new book by Nancy MacLean called, “Democracy in Chains”, about James M. Buchanan, a Nobel Prize winning economist who helped shape today's “anti-government politics.” It brought into focus for me, the actions of many politicians and their basic memes and actions.

I won’t go into too much detail, but want to share some of the sacred memes I encountered. Today’s demographics have definitely altered the political landscape. Now nearly four in 10 Americans live in the South, roughly, 122 million people. Texas used to be controlled by Southern Democrats like LBJ. The South is the “cradle of modern conservatism” as the article claims. Some of these ideas can be traced back to the Civil War and the Civil Rights movement. One main meme here is the conviction that, “an ever spreading government bureaucracy” spelled the end of Democracy.

MacLean states that, “during the post-WW2 years, economists were shaping pro-market economics, part of a growing backlash against the policies of the New Deal.” This also forwarded Libertarian Doctrine. The cherished “mores and folkways” were under siege. The enemy now was the government, its Supreme Court and power and the villain of the “Liberal Establishment” (Media, Jews). These were a danger to the freedom loving individuals and their “rights.”" Every individual should be free to associate with persons of their own choosing, not dictated by the State", the sanitized phrasing of the segregationists.

What I found most interesting was her description of how, "We The People”, the public, are the enemy itself, expressed through the tyranny of majority rule. The have-nots preyed on the rich, government-centered clientelism and dependency. Going back to a purer capitalism would basically” declare war on Social Security recipients, veterans, farmers, educators, state and local officials and the housing industry.” 

I can now better understand politicians like Paul Ryan and his “ilk" whose convictions are that the democratic majority can’t be trusted, empowered minorities like the Freedom Caucus, are the true guardians of our liberty and will resort to drastic measures: shutting down the government, defaulting on the national debt and our modern “vetocracy”, - refusing, for example, to bring an immigration bill to a House vote, lest it pass.

MacLean claims that this is not obstructionism, but an upholding of the sanctity of an ideology against the sins of the majority. “This is what drives House Republicans to scale back social programs and shift the tax burden from the 1 percent onto the parasitic mob, or to come up with a health-care plan that would leave Trump’s own voters out in the cold.” Good Samaritanism, helping the unlucky, cushions them against the consequences of their bad choices.

The Rabbinic sages of the Mishnah understood more than two thousand years ago about governments. In tractate Avot in the Mishnah they teach, “Be guarded in your relations with the ruling power, for they who exercise it draw no man near to them except for their own interests, appearing as friends when it is to their own advantage, they stand not by a man in his hour of need.” On the other hand, they were astute observers of human nature, Rabbi Chanina, the Vice-High Priest said, “Pray for the welfare of the government, since but for the fear thereof, men would swallow each other alive.”

Government stands for order, without it there would be chaos and anarchy. Humans need regulation and they also need to always have someone watching -- to what extent should be determined. Otherwise our greed and lust for power leads to misery for the most vulnerable in society, inequality, poverty, war, apathy and the death of Real Creativity.

I have no answers! But Jim Myers and I have an option. We suggest that people adopt a standard like the TOV Standard to judge both the government and the society. We need to ask, are my words, thoughts and actions going to PROTECT LIFE, PRESERVE LIFE, MAKE LIFE MORE FUNCTIONAL AND INCREASE THE QUALITY OF LIFE? Whom and how will our decisions affect others?

We need leaders, who are not afraid to lead, who have integrity and transparency, who don’t use their election for their own personal agenda, to impose their Memes upon everyone else. Representatives that work for justice and who remember they have a conscience and an obligation to The People.

We are all interconnected. We need one another. We are Genetic, Memetic, Social Creatures. The only way to repair the world is through “nourishing our interconnectedness, our creativity our ability to find solutions together.” That’s what the TOV model offers.

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Shalom,

Rabbi Jeffrey Leynor