Here it is (in dollars to simplify): If a Cypriot put $1,000 in an island bank four years ago and left it there, today the saver would have a balance of $1,250. Take 10 percent off, and the saver is still up $125.
If a US middle-class family put $1,000 in JPMorgan or Citibank four years ago, the balance today would be $1,010 — less bank fees, which means it’s probably closer to a $950 balance. That’s $9.3 trillion in US deposits getting nothing in return except the warm, fuzzy feeling of bolstering the banks’ balance sheets.
This does not excuse the ECB action, but it puts into context what Ben Bernanke’s Zero Interest Rate Policy (ZIRP) has done for Americans. The Fed chief or the Obama administration would never be as blunt as their EU counterparts and call it a tax, but if Uncle Sam — through his policies — is reaching into the pockets of Americans . . . it’s a tax.
And what is this ZIRP tax for? A bank bailout just like Cyprus’.