Monday, July 21, 2008
“But everyone who hears these words of mine and does not put them into practice is like a foolish man who built his house on sand. The rain came down, the streams rose, and the winds blew and beat against that house, and it fell with a great crash.”
I was doing some additional research this weekend, and discovered that investors purchased $1.799 billion worth of Series I U.S. Savings Bonds for calendar year 2007. Assuming this dwindling rate of new investment were to remain constant in future years, the government would save only $21.6 million in incremental annual interest expense by cutting the fixed rate for these bonds to 0.0% (from an already low 1.20%).
It’s absolutely inconceivable to me that the government would thoroughly discourage savers like myself from investing in our country to save a mere $21.6 million.
Furthermore, at around the same time the fixed rate on Series I bonds was slashed to 0.0%, the government started sending out Economic Stimulus Act of 2008 rebate checks to eligible taxpayers. So it amazes me that the government could afford $152 billion to promote spending, but could not afford $21.6 million to promote saving!
In my humble opinion, financial strength is built not upon the shifting sand of reckless spending, but rather upon the solid rock foundation of saving and investment.
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