No money to borrow?

October 10, 2008 1:35:15 PM PDT
Lemme get this right. The credit market has dried up, it's darn-near-impossible for most folks to borrow money, and so the Federal Reserve's answer is to lower interest rates?

So now it's less expensive for people to borrow money that doesn't exist and that they're not qualified to borrow? Isn't borrowing money easily one of the ways we got into this mess? You know - people putting down 5% or so for a house they couldn't afford? Or businesses funding their cash flow entirely with lines of credit?

The market took another dive today, dropping even more after the Fed hint that it would likely drop interest rates again this month. Apparently the announcement didn't have its intended effect.

Just how tough is it? The latest government data show that consumer borrowing fell in August for the first time in more than a decade. People just aren't spending, and in an economy that depends mightily on consumers borrowing and buying, it's another crucial indication that the biggest financial engine in the world is, to use the technical term, in deep doo-doo.

We'll have the latest on the economy and the market, tonight at 11.

We're also watching the Presidential debate - the second head-to-head between John McCain and Barack Obama. This is a town-hall format, which McCain supposedly likes. Our political reporter Dave Evans is in Nashville for the debate, where he'll have the highlights. And our Jeff Pegues will be watching the debate with some local voters; he'll have their reactions, tonight at 11. You can also submit your reactions on 7online.com during and after the debate by clicking here.

And we're following the latest twists and turns in the term-limits debate. The New York City Council will hold hearings in the next two weeks about whether to overturn the twice-voted will of the voters and abolish term limits. I know there's much passion on each side of this argument: The power of incumbency is real, but when someone is good and talented at her or his job, why limit how long they can serve? Both arguments have validity.

But that's not what's at stake here, in my humble view. The voters have voted - and that's big. If someone wants to change that, then let the voters decide. How undemocratic to circumvent that process, no matter how valid or invalid the reasoning - which, in this case, is giving Mayor Bloomberg a shot at a third term.

Why is it that New York Mayors suddenly find it so difficult to let go when their time comes? Do you remember Rudy Giuliani's last-gasp attempt to stay for another spell after the Sept. 11 attacks? Bloomberg suddenly has a similar you-need-me-desperately philosophy. I think the most effective anti-term-limits campaign would be led by a politician who says he or she would not be included in the result. Mayor Bloomberg wants to overturn term limits? Then he should fund and lead a public campaign against it -- and then say he would leave office even if he would be allowed to run again. That takes the self interest out of it. But this seems all about self interest. My two cents.

We'll also have any breaking news of the night, plus Lee Goldberg's AccuWeather forecast, and Scott Clark with the night's sports. I hope you can join Liz Cho and me, tonight at 11.

And one other note: because of the Jewish holiday, this column will be on hiatus for two days. It will resume on Friday.

BILL RITTER


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