Federal Reserve: Stop Discouraging Banks from Lending Money

Target: Ben Bernanke, Chairman of the Federal Reserve

Goal: Stop paying banks interest for not lending money

As we all know, America is in the worst financial crisis since the Great Depression. The economy is slowly looking up, but the crash took an enormous toll on millions of Americans’ home values, retirement benefits, and employment options. And we all know that banks were bailed out of debt at the worst point in the crisis in order to keep the value of the dollar from plummeting into worthlessness.

What you may not know is that banks currently hold “excess reserves” of about $1.6 trillion. They are hardly hurting anymore, especially since the Federal Reserve pays banks 0.25% interest for not lending money, equaling about $4 billion a year total. Bankers also get bonuses from that interest if they don’t lend you money.

Meanwhile, the average household income is about $50,000, with an average net worth of $57,000. The average American household debt stands at around $70,000. Most Americans don’t have enough to pay for college or retirement, and owe more than they own. Since the Federal Reserve is discouraging people from borrowing money, a lot of them are a step away from being unable to pay their bills.

Also, the average American works for 8.8 hours a day, and sometimes spends over a month more time at work than people in other countries. America is often called the most overworked nation in the world. Forbes Magazine reports that only 19% of Americans are satisfied with their jobs, where they are spending the majority of their lives while clearly not amassing much money for doing so. Most of them won’t be able to get a business loan to create a more satisfying career for themselves because the Federal Reserve is paying banks not to lend money.

Finally, Americans are unhappy with the Federal Reserve in general. A 2009 Gallup poll showed that only 30% of Americans thought the Federal Reserve was doing a good job. It’s no wonder: people are in debt and unhappy with their jobs and the Federal Reserve is ensuring that this will continue with its current policy. Urge Ben Bernanke, Chairman of the Federal Reserve, to stop paying banks interest for not lending money.


Dear Mr. Bernanke,

We are disheartened by the fact that the Federal Reserve pays banks interest for not loaning money. In a country where the average citizen owes more than he is worth, a small bank loan might be the difference between that person being able to make the mortgage payment that month or not.

Forbes Magazine reports that only 19% of Americans are satisfied with their work. Many of these employees would jump at the chance for a loan to start their own business, but they have little opportunity to do so under the Federal Reserve’s current policy.

Banks can afford to lend money. Thanks to the Federal Reserve, they now have excess reserves of $1.6 trillion. In contrast, the average American net worth is about $57,000.

America was founded on the principles of life, liberty, and the pursuit of happiness, which include the chance for social mobility for hardworking people. Seeing as the average American works more than anyone else in the industrialized world, many citizens’ lack of opportunity is not due to laziness.

We urge you to encourage American entrepreneurship and stimulate the economy by not encouraging banks to hold onto their excess reserves. Stop paying banks 0.25% interest not to lend money.


[Your Name Here]

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