I have always been afraid of banksArticle added by Paul Cross on October 28, 2011
Paul Cross

Paul Cross

Pekin, IL

Joined: December 21, 2006

While banks provide us with many great services, they have also played a major role in leading us into austerity.

The wisdom of our forefathers and early presidents continues to surface as we continue down the path of austerity. Unemployment has risen beyond 16 percent and home foreclosures are at record numbers as taxes and inflation fuel the financial meltdown.

John Hanson, a founding father and the first president under the Articles of Confederation said, “You get what you set out to do.”

Are we now getting what our government set out to do?

Thomas Jefferson, the third U.S. president, said, “I believe that banking institutions are more dangerous to our liberties than standing armies."
Andrew Jackson, the seventh U.S. president, said, “I have always been afraid of banks.”

Today, I find more credence in those two statements. While banks provide us with many great services, they have also played a major role in leading us into austerity. I'm reminded of Willie Sutton, the legendary bank robber of the early 1900s. Sutton tallied up a remarkable $2 million in bank robberies. He was confined to prison numerous times and escaped numerous times. He was once asked, why do you rob banks? The masterful Willie Sutton responded, “That’s where the money is.”

Fanny Mae, Freddie Mac, Bank of America and virtually all other banks were contributors to the housing lending crises that resulted in major home foreclosures and other factors that have contributed to the demise of our economy. Has the banking industry now attracted masterminds to a new, cleverly planned robbery scheme — a way to con the government out of taxpayer money in legalized bailouts?

The bailouts did not stop home foreclosures or other related financial problems, nor has it saved the investors. Where did the money go?

Bank bailout money has reached $200 billion, with JP Morgan Chase, Wells Fargo and Bank of America each receiving $25 billion.

Protestors are again on the streets, including Wall Street and at JP Chase Manhattan Bank. Protesters carry signs that read “Chase, give us our money back, $92.7 billion” and “Banks got bailed out — we got sold out.”

I should also note that federal banks are not owned by the government; however, the federal government loans banks money, and when the banks get in over their heads, it is taxpayers that bail them out, time after time.

The FDIC is not owned or backed by the government; it is funded by the banking industry, a cost that trickles down to depositors. Yes, you’re paying unidentified insurance premiums to the FDIC.
Today, many people in retirement are dependent upon interest income from bank CDs and money markets to supplement their retirement income. Now, many are depleting their life savings and retirement plans and are plunging into bankruptcy. As of Oct. 15, bankruptcies exceed 1.5 million in 2011. Banks and federally regulated interest rates are bankrupting people dependent upon interest income from their bank accounts.

Case study

George had depleted his bank accounts down to $110,000 when he discovered that he could transfer $10,000 into a 5-year income annuity and receive more spendable income than provided by the CD. He transferred the $100,000 balance into a 10 percent premium bonus annuity with an accumulated value of $110,000 on day one. George now has more income, with substantial growth on his money.

Financial universities and economists around the globe have concluded and documented that income annuities can provide a retirement income for life at a cost as much as 40 percent less than a traditional stock, bond and cash mix, primarily due to risk, market down time and the fact that people are living much longer in retirement.

In summary, the combination of income annuities and deferred annuities and/or life insurance can provide more income, more growth, and less tax.

Now is the time everyone should look into money smart ways to enjoy more income, more growth and less tax.

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