After All, They're Too Busy Counting All The Money We Gave Them
Citigroup, endowed with some $45 billion in stimulus dollars ($300 billion, if you include Uncle Sam's backing of bad assets carried on Citi's books), and fresh off a profit of $8 billion for the first two months of 2009, must be laughing all the way to the bank.
Taxpayers, on the other hand. . .
If you have a savings account with Citi, you're getting somewhere in the neighborhood of 0.25% interest on your money. This, of course, is a heck of alot better than the interest you're getting from Citi on that $45 billion you lent them.
Meanwhile, holders of Citi credit cards – most of them, taxpayers – are being paid back by Citi with an increase in their variable rate to Prime plus 16.99%. As of December 1, 2008, that rate was 21.99%.
Heaven forbid a cardholder default, by failing to make a minimum payment or exceeding the credit line, and that rate jumps to 29.99%. Too bad Citi doesn’t pay these rates on their savings accounts and CDs!
Upping the interest rates charged to the consumer, far beyond that which would otherwise be considered usurious, does nothing to ease the credit crunch or raise consumer confidence, let alone to help financially-strapped Americans in these times of economic woe. Certainly, its no way for Citi to say “thank you” to John Q. Public for keeping this financial giant from defaulting on its own obligations.
Talk about biting the hand that feeds you. Perhaps, with some $8 billion in profits on hand, its time for the fed to call in its loan to Citigroup. At the very least, Citi should begin to pay interest. Yeah, payback is a bitch, but hey, the taxpayers could use the money right now. Then again, we suppose $45 billion just doesn’t go as far as it used to!
- - -
So, Where's Our Bailout?
Here's an idea: In exchange for the taxpayer-financed bonuses being paid to the folks who lost all that money at AIG, we, the people, are afforded a one-time opportunity to convert all of our regular IRA accounts to Roth IRA accounts, absolutely tax free!
Fair is fair, after all...