Anyone elected president next week faces the daunting task of jump starting the US economy. Not so easy -- even for the clearly intelligent and magnetic Mr. Obama. While the US government has provided loans, guarantees and bail out funds to the private sector in excess of $5 trillion dollars -- gulp -- the amount of leverage the government has over the USE of those funds is surprisingly small. So while there is a battlecry from within the Treasury Department to get those fund-recipients -- that is banks-- to start lending out that money.. supposedly to get people back to work, and revenues flowing into state coffers... the banks are holding back. They say they are being prudent.

The banks aren't just sitting on their hands though. They're pressing hard on debts owed to them: anything with a variable rate is being jacked up: interest rates on credit card accounts are going up, fast, as banks see the prospect there of widespread default.. Their approach: get the most out of consumers as fast as possible, weed out those who can't pay, like the newly unemployed -- there are many and more to come -- and raise revenues that way. No relief, they say, will be offered to anyone who has defaulted on a mortgage and lost a job. Sorry, too vulnerable. In fact, the more vulnerable you are the less assistance you will get. Unless of course you are a bank. Too big to fail; too little to matter.

While the banks are doing that to you, the government is lowering the cost of the money it loans to banks... to LESS than 1% in some instance.

What it amounts to is this: the economy is so sluggish, confidence so low and prospects so few that banks and their strongest customers can borrow money for little or no interest. One thing big banks are doing with their money -- buying smaller banks.

After all the talk of change, the Federal government's at it again -- letting the banks take the lead -- this time with our money. What to do if that doesn't work? Or the banks won't work for us? Don't ask. That's a question for the next President, next week.

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