The government does not set the prime rate. Prime rate is a tool for a bank to simplify adjusting the interest on their products, from mortgages to credit lines. Each bank set its own prime rate, and, technically, it can be set to any number, as long as it moves in lockstep with BofC overnight rate. In practice, however, all banks set their prime rates to BofC rate 2%. Do not ask me where these 2% came from, but they allow banks to offer loans at less then prime and still earn money on the difference with BofC overnight rate.

The Bank of Canada overnight lending rate at the moment is 1%. Current prime rate is 3%. There is a 2% difference between the BOC overnight lending rate vs. prime rate used by banks, The overnight lending rate is used by the banks to borrow money from each other overnight. Any changes to the overnight lending rate would change the prime rate used by banks to lend money. There are 8 time in a year that the BOC would review the rate and change it if needed. This rate also affect the Canadian dollar`s exchange rate.

The BOC overnight lending rate dictates the prime rate. Currently (August 2011) overnight lending is 1% and prime is set at 3%. You still get discounted rates for mortgages like Prime minus 0,75% or 2.25%. Every time overnight lending rate changes, prime rate and discounted variable rates changes. This also applies to your personal line of credit where you would get prime plus 3% or 6% and the like.

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Why should obama even consider a plan that the federal government, which has already given over hundreds of billions of our dollars to banks with bad loans (and who now have their hands out for another two trillion) open a "national bank" to buy up such bad loans and then sell them in time to the public sector, without expecting that these private banks and bankers work to refinance the bad loans into good loans? you must ask yourself this: "what is the business of a bank?" and the answer is only this: the business of a bank is to make money. that is the only business of a bank. and so, if the obama administration is considering using our tax dollars that are non existent anyway to establish a national bank that will buy up bad loans, how would that benefit you and i? why is no rule put upon the banks that want more and more and more of our money to bail them out of the financial crisis that they themselves put themselves into requiring that they, themselves, who are in the sole business of making money, to require that they restructure their own lousy loans so that such loans become profitable to them rather than putting their fat hands out to collect even more money from not only you and i, but from our progeny? why should we even consider allowing the federal government to set up and run a bank that will absorb bad loans? would it be profitable to we, the people? as far as i can see, practically anything that the federal government puts its inept nose into fails and/or makes our lives more complicated by more and more federal regulations, which in turn create jobs within the federal government itself, but do nothing to benefit the working man? will a national bank that buys up bad loans benefit the people of america? why would it? take a look at the article linked here: http://tpmcafe.talkingpointsmemo.co m/2009/01/24/the_banks_have_stolen_ enough_its_time_to_take_them/ and then, please give me your personal opinion, as a citizen of this country, as to why you would want the federal government to open up an institution whose sole purpose is to make money, i.e., a national bank? would you deposit your wages (if any) into such a federal national bank? why would you do that? what reward would you get for doing so? do you think that the interest that the federal government might pay you would be worth your deposits, just like the deposits that you make to the federal government out of your paycheck in the form of taxes that are supposed to pay for those things that you need which you cannot pay for yourself (such as war)? don't you think that rather than our federal government building up its "national bank" that the lenders that made bad loans out of their greed, so that they could continue paying themselves millions in salary and bonuses and perks and stock options while being seated each day in plush offices with views from huge windows that you'd just love to be able to have yourself from your house (condo), should have to put their loan officers to work at making those bad loans into profitable, good loans? it's so simple. we give $0.00 to the banks. they already took our money with no requirement that they account for how they spent it. so now they say it is not enough. okay, if it is not enough, why don't they figure out how they can make money off of their loans? if that is the business of a bank--making money--and it is, the only business at that, why don't they figure out yet more creative ways to shut down this foreclosure disaster and change it to profitable business for them? this is what they do with their bad mortgage loans: they rewrite them into fixed rate, (very) long term mortgages. they fix the rate of interest at only one point above the prime rate, as it is today. and then they stretch out the amortization schedule of repayment to 100 years or more than 100 years in order that the payments are profitable to them. and they charge "points" (a point is one percent of the face value of a loan) to refinance these bad loans, but they put these points into the loan itself. and of course, they charge their outrageous fees, but they put those fees into the loan also. in fact, they could structure the new mortgages so that their points and fees are what is paid first. if you own real estate, you should call up your real estate broker so that s/he will print out an amortization schedule for you so that you can see how much of what you pay per month goes towards interest on your principal balance. this way you will understand what i am proposing. ("amort" is a french word that means "to kill," to kill off the principal). okay, if you do not agree with the above work that the banks should do, which will keep their employees employed and paying taxes to the government (about $0.61 out of every dollar that they spend, all taxes over the year combined), then what do you propose that the banks do? do you propose that they had been omitted: ...), then what do you propose that the banks do? do you propose that they should go bankrupt? how and why? or, do you think that this new idea of forming a "national bank" that will be funded on our money will resolve the problems that the banks face? if such a national bank were established, would the banks still have their hands open to catch yet another two trillion of our dollars? what will they do with that money anyway? what will we, the people of our country, have to pay to fund the establishment of this national bank that obama has proposed? i like detailed answers with something that backs them up. even if i do not agree with you, i never give a thumbs down if you back up your argument, so feel free to exercise your constitutional right of free speech in your answer. and thank you. ha ha! the first person that attempted an "answer" gave a non answer--that's a first! the first person that answered was "reallypablo," who is a top contributor. read his "answer." you will laugh.

I hear ya. We're seeing a pattern here aren't we. Here's another example. This is expected to create 1,000 'new' government jobs. They can deny that it's socialism but those of us who are paying attention know better. Wake up folks! IRS shifts away from private debt collectors Posted: Today at 5:46 p.m. Updated: Today at 7:06 p.m. WASHINGTON — So much for privatizing the federal government. The Internal Revenue Service's decision this week to quit using debt collectors to dun delinquent taxpayers was celebrated by public employee unions as a pendulum shift after watching the Bush administration often opt for private contractors over federal workers to deliver government services. The IRS program was a small one, bringing in a little more than $80 million since its inception in 2006. But it represented an ideological toehold for conservatives who believe that private companies are more efficient than government agencies.

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True/false questions: please write next to the question number either “t” or “f”. 1.with a reserve requirement of 25 percent, an injection of $100 million of new excess reserves into the economy could cause the money supply to expand by $400 million. 2.the interest rate charged by a depository institution for all loans is set by the federal reserve. 3.a decrease in excess reserves would lower the interest rate on loans. 4.an increase in excess reserves in the economy would encourage spending. 5.lowering the reserve requirement is a tight money policy. 6.if a bank does not meet its reserve requirement it can borrow from the fed or from other banks in the federal funds market. 7.the prime rate is the rate paid by financial depository institutions to borrow reserves from the fed. 8.open market operations are the fed's least frequently used tool of monetary policy. 9.buying securities by the fed would decrease excess reserves held by financial depository institutions. 10.profit-maximizing behavior requires businesses to reduce their costs as much as possible, even if it means endangering their workers or the environment. 11.crowding out occurs when government borrowing forces up the interest rate and discourages households and businesses from borrowing. 12.the fed has generally not followed a philosophy of increasing excess reserves to finance government deficits. 13.in the keynesian model, total spending in the economy will be less than total output if leakages from the spending stream are less than injections. 14. actions of the federal reserve will have little if any impact on the money supply if banks are unwilling to make loans or borrowers are unwilling to borrow. 15.the acceptance of economic theories depends only on their logic, and not on how well they explain economic events. 16.all macroeconomic models attempt to explain the same relationships. 17.the classical economists held that the economy tends to operate at full employment. 18.classical economics favored government intervention in the operation of an economy. 19.the classical economists believed changes in wages and prices would help to ensure that the economy would operate at full employment. 20.the classical economists thought that supply creates its own demand and investment spending always equals saving. 21.according to keynesian economists, government efforts to stimulate the economy always lead to inflation. 22.in the new classical model, aggregate supply is upward sloping in the short run, and perfectly vertical at the natural rate of unemployment in the long run. 23.the interest rate effect, the wealth effect, and the foreign trade effect cause the aggregate supply curve to be upward sloping in the new classical model. 24.the new classical economists hold that rational expectations and adaptive expectations by businesses and households are important factors standing in the way of the federal government's success in managing the economy. 25.the argument that individual decision making in businesses and households affects the macroeconomy is part of new keynesian economics. 26.the position that wage and price flexibility will bring the economy to the desired level of output is shared by the classical school and the new classical school. 27.the position that classical economics and keynesian economics were both correct is espoused by the monetarist school. 28.a typical phillips curve shows that there is a direct relationship between an economy's rates of inflation and its rates of unemployment. 29.in the u.s., the rate of inflation associated with any given rate of unemployment was typically lower in the late 1990s and early 2000s than it was in the late 1970s and early 1980s. 30.fewer teenagers in the labor force would cause a lower rate of unemployment to accompany any given rate of inflation. 31.the number of single-person households in the u.s. has been decreasing in recent decades. 32.the size of households in the u.s. with one person has been decreasing in recent years. 33.households headed by college graduates have among the highest average incomes in the u.s. 34.a durable good has a useful lifetime of more than one year. 35.maximizing economic well-being by an individual requires balancing the costs and benefits of different actions that could be taken. 36.to maximize the satisfaction from consuming several different goods, expenditures must be allocated toward goods that have the lowest prices. 37.maximizing economic well-being from earning income requires taking the job that pays the highest salary. 38.a sole proprietor and a general partner are both subject to unlimited liability. 39.a sole proprietor cannot raise funds by issuing stocks and bonds. 40.proprietorships generate the smallest percentage of total receipts of the three legal forms of business. 41.a bondholder is an owner of a corporation. 42.the majority of total business receipts in the u.s. goes to corporations. 43.most u.s. businesses are organized as corporations. 44.a holding company is a corporation formed for the purpose of owning or holding shares of stock in other corporations. 45.a conglomerate merger occurs when one firm in a market acquires a competing firm in the same market. 46.a furniture and sofa manufacturer buying a lumber or fabric mill is an example of a vertical merger. 47.profit or loss is what is left for a business after it subtracts its costs from the revenue received from selling its product. 48.keynesian economists do not think flexible wages and prices ensure that an economy will operate at full employment. 49.profit or loss is equal to revenue divided by costs. please help everyone! my grade depends on your input! i can't do this myself. we had to create a practice assignment for other people to do..it's a class study on your general knowledge of econ..

That's too many dang questions at once! I got frustrated and gave up.

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Http://archives.clintonpresidential center.org/?u=102397-vp-announces-r ecord-homeownership-level.htm http://www.nytimes.com/1999/09/30/b usiness/fannie-mae-eases-credit-to- aid-mortgage-lending.html http://www.presidency.ucsb.edu/ws/i ndex.php?pid=51448 october 23, 1997 (from the clinton archives) in 1994, president clinton, along with the national partners in homeownership, set a goal for the nation to achieve an all-time high homeownership rate by the year 2000. today -- a full three years early -- the census bureau reported that in the third quarter of 1997 the homeownership rate climbed to its highest level ever. here are some of the results from the census report, as well as other housing-sector statistics: in 1995, at the request of president clinton, the administration convened the national partners in homeownership to carry out a national homeownership strategy lowered closing costs by $1,200 for qualified first-time home buyers. the clinton administration has cut fha home mortgage insurance premiums four times in 1999, under pressure from the clinton administration, fannie mae, the nation's largest home mortgage underwriter, relaxed credit requirements on the loans it would purchase from other banks and lenders, hoping that easing these restrictions would result in increased loan availability for minority and low-income buyers. putting pressure on the gse's (government sponsored enterprise) fannie mae and freddie mac, the clinton administration looked to increase their sub-prime portfolios, including the department of housing and urban development expressing its interest in the gse's maintaining a 50% portion of their portfolios in loans to low and moderate-income borrowers.[9] fannie mae eases credit to aid mortgage lending washington, sept. 29, 1999 — in a move that could help increase home ownership rates among minorities and low-income consumers, the fannie mae corporation is easing the credit requirements on loans that it will purchase from banks and other lenders. the action, which will begin as a pilot program involving 24 banks in 15 markets -- including the new york metropolitan region -- will encourage those banks to extend home mortgages to individuals whose credit is generally not good enough to qualify for conventional loans. ***** fannie mae officials say they hope to make it a nationwide program by next spring. ****

They fixed it alright, just like the veterinarian does to your pet. These democrats have done so much harm to our nation. They play games trying to "help" people, they try to level the playing field. Well, that is nice and wonderful. However, having the income to PAY for a mortgage and the occasional broken window or new lawnmower... should have stayed as a primary requirement. This social justice utopia mentality of these democrats have harmed us so badly. Socialist Security is something that never should have been, that and medicare. Socialism, leveling the playing field, spreading the wealth around... These are key buzz words that should raise the hackles on any reasonable thinking human being. .

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The topic is "freedom in america", and i'm writing this for a scholarship freedom in america many people in our country today have such disrespect for our government. with congressional and presidential approval ratings reaching such a low point that you would suspect right after a watergate scandal. people state that our government is bad, why? because it's slow? because it seems to do little? because of it's members? i wish these people would've paid attention a bit more in their government or history classes, because our government roots from this country's message of freedom. freedom which shocked the world since 1789. this country has endured so much change in culture and values throughout the ages, but the one value that will always stay the same is sweet liberty. the kind of which the colony of new england was brought upon. how the people aboard the mayflower were sick of being persecuted for their religion, and were sick of having such a small voice in english government. its no wonder why there wasn't a draft for the american revolution, because the fact was that the american people wanted to rule themselves, wanted the freedom to trade with whomever they wished, wanted equal representation in their own government which they could not find anywhere else. after we won the revolution, the thing that we feared most was a tyrannical government. so, the states were given most of the power and each had equal representation under the articles of confederation. this system didn't turn out so well, because we needed a strong central government to tax, assemble the militia, and pull the country together. the men who would soon be known as our founding fathers created our constitution in 1787, which was ratified in 1789 after adding a bill of rights. our constitution starts "we the people" which corresponded to john locke's idea of the government ruling by the consent of the governed, and set the tone for a new government which provided the strength that the country needed but not at the expense of giving our people any less freedom than they deserved as citizens. its amazing how this document still shapes the basis of our government after more than 200 years, but today there are people who wonder "why is our government so slow?" or "why does our government fail to pass a lot of legislation"?; our people's fear of tyranny along with james madison's fear of the majority lead our clever concept of government to be divided in different ideals and values in order to provoke compromise and prevent quick sweeping changes. i believe that people are too skeptical to ignore the idea of freedom sinked into our government compared to a parliamentary system. in a parliamentary system, legislation is passed with little thought very quickly, which if you think about it, is not exactly my idea of freedom. if a majority is formed in parliament, then the rights of the minority parties are most likely ignored and put down. can you imagine this in our presidential system? that would be catastrophic! in fact, in a parliamentary system, members of the parliament aren't given many rights at all. when people in england go to vote for a candidate, the candidate's name isn't even on the ballot! only their political party. if any member of the majority or especially the prime minister doesn't vote the way the majority wants them to, they can be replaced. in our three-branch government of checks and balances, i thank the fact that our president and members of congress have the freedom to chose the way they think is right without fear of being kicked out if the majority party doesn't agree with their actions on certain issues. when i took american history one year ago, my favorite point in history to study was the 1960's. the changes in values, or perhaps the fight between the changes in values got me thinking "why did such a thing occur in our country?" and "should the government have allowed it"? i've seen videos of the old tight-fisted conservative saying to the young raggedy-dressed liberal protestor "this is america, either love it or leave it!". this brings me to why i feel that america really is the country of freedom. how after 200 years since our people experienced the first surge of liberty, our people can still say what they want, believe what they want and protest what they want; even our own government. so whether you dislike or like our government, you are still exercising the freedom that our founding fathers, that the original americans always wanted and fought so hard for. and that is, in my opinion, freedom in america.

Probably an 8. Other than a few grammatical errors, you provided a well discussed topic of which many people throughout the United States have debated about.

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Im ony 12 so no harsh answers song 1 imagine a rhyme in its prime straight off the bass line skyscraper verticals support the hang time evidence that was left at the scene off the crime trace back to you get shot up nine times when you hear me youll pay full price for a ticket on stage sreamin, whatever- still kick it the footwork of jacob l, its all new now the rap commisioners want to lock me up for 2 the road aheads hard- its difficult to climb with the heat, oh s#!t, i lost my nine its hard to stay align, the course is an obstacle within me the force is unstoppable im a lyrical swordsman - each blade sharp will cut out your heart mcs want no part in conflict- cuz then i respond quick they get sticked, the problem is beyond sick song 2 with this mic i can set the world alight with this mic i can give you the fuel to fight with this mic im giving the people back their rights to say what they want to say and not be afraid to not give a f--k about the government today they try to hold us back, but im gunna push stand tall and just stomp on the prez's face till itll mush our economy is sh*t, just like bush when people say stars and stripes now, what do they mean im going to have to rewrite history for these dumba** muthaf**kers who might say im obsene hicks with no shirts and torn up jeans do they think i give a f**k what they think im more concerned to whats happening to my streets were drowning ourselves in our own stink im pulling all of us back from the brink just to show congress that people can think and actually have a say in what happens to us you dont really wanna make me bust so who can you trust u can and u must trust me dont let my legacy wither and bleed song3 ayo i dont want to hurt em-burn em teach em what ill learned em-the meaning off my words is like spoon and i will serve em, i give it to him straight i will never ever curve em he felt like he was screaming but nobody ever heard em he felt like he was bleeding like the hands of a murd-ra he must live to him death is unheard of but he is not affraid to die either in any circum-stances but he will never take that many chances hes living in his head,hes never fir-ma-ly planted. hes waiting for some type of cheer to be chanted epifoni…we demand you so im here to rip up the one twos. are u ready im here to come sooth,ya hip hop needs demands misconscrued, i give em to u different unused-and u will never get it the same from no dudes im sorry for ever chilling wit ya fools sellfish sorry but i can not help it ill shit on other rappers till the industry smells it ill change it, melt it,make the game a helmit,then put it on my head and run through them until they felt it put it to they backs like children and belt wips i spit fire my bullets are from hell clips now tell me that aint one hell of a fuckin sells pitch im like no other son of a fucker u delt wit ill put the mack to u like brrraaattt and leave u helpless which song did you like best?

Hmmm... being a dork I wouldn't trust my opinion... However... Start like this "A place where nobody dared to go..."

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I found this very interesting considering the finger pointing going on. i believe our situation is caused by clinton setting it up so that everyone can get a home loan at sub prime rates with no money down. here is an excerpt for an article in the new york times, dated september 11, 2003: the bush administration today recommended the most significant regulatory overhaul in the housing finance industry since the savings and loan crisis a decade ago. under the plan, disclosed at a congressional hearing today, a new agency would be created within the treasury department to assume supervision of fannie mae and freddie mac, the government-sponsored companies that are the two largest players in the mortgage lending industry. the new agency would have the authority, which now rests with congress, to set one of the two capital-reserve requirements for the companies. it would exercise authority over any new lines of business. and it would determine whether the two are adequately managing the risks of their ballooning portfolios. the plan is an acknowledgment by the administration that oversight of fannie mae and freddie mac -- which together have issued more than $1.5 trillion in outstanding debt -- is broken. a report by outside investigators in july concluded that freddie mac manipulated its accounting to mislead investors, and critics have said fannie mae does not adequately hedge against rising interest rates. ... the proposal is the opening act in one of the biggest and most significant lobbying battles of the congressional session. ... ''the current regulator does not have the tools, or the mandate, to adequately regulate these enterprises,'' mr. oxley said at the hearing. ''we have seen in recent months that mismanagement and questionable accounting practices went largely unnoticed by the office of federal housing enterprise oversight,'' the independent agency that now regulates the companies. ... significant details must still be worked out before congress can approve a bill. among the groups denouncing the proposal today were the national association of home builders and congressional democrats who fear that tighter regulation of the companies could sharply reduce their commitment to financing low-income and affordable housing. ''these two entities -- fannie mae and freddie mac -- are not facing any kind of financial crisis,'' said representative barney frank of massachusetts, the ranking democrat on the financial services committee. ''the more people exaggerate these problems, the more pressure there is on these companies, the less we will see in terms of affordable housing." the full article is [url=http://query.nytimes.com/gst/f ullpage.html?res=9e06e3d6123bf932a2 575ac0a9659c8b63&scp=1&sq=& quot;barney+frank"&st=nyt] here[/url]

I cannot believe you used "bush" and "smart" in the same sentence and we weren't all sucked into oblivion

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Convert 12% of farmland in the uk into 90% woodland and 10% housing. this would build roughly 3.8 million houses and add another 560,000 hectares of forest, increasing the amount of woodland by 56%, cutting our carbon footprint by 8% and generally improving the environment. then use the foreign aid budget to build farms in the developing world by buying licenses of the governments there. we can then use the food grown in this otherwise unused but productive land to feed our population and increase food sustainability. if needs be, we can use uk troops to protect these farms, though this may be unnecessary as we should try to get the foreign governments to control crime. it would benefit the countries as they would have their rate of growth increased and unemployment decreased. and just to clear one thing out the way, africa is not all barren and unfertile. it has 28% of all the worlds arable land, more than any other continent, even asia. the reason it is not very productive is that it is poorly run by corrupt governments. prime examples are sudan, congo, zimbabwe and south africa. as for cost, if housing could be done by the private sector it would not only cost nothing, it would increase tax revenues, possibly offsetting the costs of the rest of the policy. the cost for land in other countries ought not to be much and the cost of setting up farms would be a few million for each farm, but overall not much in comparison to the government budget as a whole. planting forests may be rather expensive though, however as it is such a large project there may be significant interest in allowing people or companies to sponsor it and receive naming rights in exchange. any criticisms? any improvements? i believe all my facts are correct. better yet, bump this and comment on it if you want to see it passed or scrutinised :) http://yourfreedom.hmg.gov.uk/cutti ng-business-and-third-sector-regula tions/how-to-reform-the-foreign-aid -to-better-help-the-third-world-dev elop-increase-food-security-reduce- co2-increase-forest-cover-in-the-uk -and-build-cheap-and-affordable-hou ses-for-british-people-3/idea-view

12% of farmland is quite a lot when you are speaking about the UK. And farmlands here, have a very diverse and complex ecosystem of its own. So any changes like converting them into housing plots or woodlands could mean disastrous effects on lesser noticed creatures like Large Blue Butterfly. And consequently to other creatures in a long chain of inter-dependence. But then of-course carefully planned farmlands could be used as your above stated proposal. The foreign Aid Budget to build farms in developing countries seems like a good method , however the food grown there to provide the population of UK would mean having to move them halfway across the world increasing the CO2 footprint. Also to the more educated masses and environmentally ethical believers locally grown food would hold a more ideal option.

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Well; i think the whole system is run incorrectly, i would run the government more like a bussiness. i would invest in a solar power plant that could power the nation the nation and more (a panel merely 30 hectares). i would start a public bank with a permanent interest rate of 5%, while the big banks, forced to compete, would have to get interest rates down to something able to compete with 5%. i would make an official cattle slaughter day, where all domesticated cattle would be slaughtered. why do this? you ask, because cows account for 18% of global warming with their burping, and to make but 1 kilogram of beef, 150,000 litres of water are used! this would end our terrible drought in the southern states. i would make a law that every petrol shops have to sell diesel .i would make a law that all produced paper and cardboard would have to be made out of 100% recycled product. i would be able to sustain this by setting a birth limit of 1 child per person. so would i be a good pm?

Okay, you do have a budget, think about that. I support every idea except the cattle killing, because farmers work hard to get those cattle for the market, and what do all big brands like Woolworths do, they don't buy it, they buy overseas instead. I know this because my friends and farmers and we often go mustering etc. I like the idea of the bank, however you may be a bit unpopular. I like the recycled bit. But I think you are violating human rights with the only 1 child per person. That would make you very unpopular. Love the solar powered idea, wouldn't power the whole country though, we will still have to keep some old power plants until you can afford more. If petrol shops sell just diesel, thousands of people will have to buy new cars, and not everyone can do that, that would make you very unpopular. To answer your last question, no, sorry, you wouldn't be a great PM, you would be an ok one. The paper recycled and solar power and banks are good, but the rest will make people hate you. PS: Killing cattle on one day will not end a drought, it will calm it, then it will get started. PPS: Sorry I didn't think you would be a good PM. Some of your ideas were just a little over the top. PPPS: You need to think about the impact of some of your ideas, good and bad. PPPPS: With the diesel bit, I actually meant millions of people will have to buy new cars. PPPPPS: If you say these ideas in an election campaign, I guarantee you will not get voted in, many people will not like you. SOrry but I don't really like the ideas. PPPPPPS: If I were PM, I would get the big super markets to buy Aussie made products.