Hands off: Will federal authorities keep you from your own money in the face of another financial crisis?

Are U.S. federal government policymakers planning for an economic meltdown? Fiscal and financial news isn’t a particularly sexy topic for broad audiences, even under normal circumstances. And over the Thanksgiving national holiday weekend, about the only news people care to consume is football scores.

But as we enjoyed turkey dinners, shopping, and hopefully some quality time with friends and family — and even in the recent days leading up to the holiday weekend — some major policy ideas and changes have emerged that could keep you away from your personal finances in the face of another meltdown. Americans are rightly angered right now by the disastrous impacts of the Obamacare implementation, but consider what else may lie ahead for our lives, our households and our livelihoods.

For one, there was the November 25^th report in the Financial Times indicating that the U.S. Federal Reserve is considering the possibility of arbitrarily cutting the amount of interest it pays on money that it borrows from private commercial banks. The interest that the government pays when it borrows money from private banks is, understandably, a big revenue stream for those banks. If the Federal Reserve makes this move, banks say they will in turn need to make up for the lost revenue by charging private individuals, households and businesses for depositing money in their accounts.

Let’s be clear about what is under consideration here. Customarily, when an individual or an organization puts money in a bank account, the bank will pay their customer at least some nominal level of interest in exchange for the privilege of possessing the customer’s money for a period of time. In the scenario that the Financial Times reported, some banks would completely reverse this historic bank-customer relationship and charge private individuals and businesses for the privilege of “parking” their money in an account for a time.

Could that create a bit of a backlash against banks? Recall that in March of this year, the dreadfully overspent government of Cyprus arbitrarily chose to impose a tax on all private bank deposits as a means of feeding the government’s never-ending hunger for money. This created a “run” on banks with private citizens rushing to clear out their accounts, which in turn led the government to force private banks to close for about 10 days. When the banks re-opened, citizens were only permitted to withdrawal about $383 of their own money each day — a quick-fix that Nobel laureate economist Christopher Pissarides said was “extremely unfair to the little guy.”

The Cyprus Crisis — as well as the meltdown of financial systems in Spain and Greece, among other places — may be what led one of President Obama’s appointees to the U.S. Federal Reserve’s board of Governors to propose a means of stopping “Bank Runs” here in America. According to a November report from Reuters news agency, Dan Tarullo, whose specialty is “financial regulation,” has proposed that banking regulators (like him) need to “supplement prudential banking regulation” with more “policy tools” — i.e., the ability to order banks closed. Tarullo and the other Fed Governors are working on a new set of such “policy tools” to be unveiled in 2014.

So, is the American financial system a safe place to keep one’s private assets?  Bloomberg News reported one year ago that the U.S. Federal Reserve was weighing the possibility of trying to force foreign banking institutions to play by the U.S. government’s rules. Today, that process has already begun, with Federal Reserve authorities notifying foreign banking institutions that they must report all American-owned assets and enforce American banking rules.

In economic terms, this is called “capital controls” — an effort by the U.S. federal government to control private peoples’ money as much as possible and prevent it from leaving the country. Over the past six months, private banks in Canada and New Zealand have become increasingly stringent with their willingness to hold deposits from Americans, and within the last two days, the British territory of the Cayman Islands acquiesced to U.S. pressure and signed a controversial agreement that, for the first time, will require banks there to report all deposits from American citizens to American governmental authorities.

Why is this happening? Officials from the Federal Reserve and the U.S. Department of the Treasury say it’s all precautionary. In case another 2008 type financial “meltdown” ever occurs again, so the reasoning goes, the U.S. will have as much control as possible over the global financial system.

But fundamentally, and philosophically, there is an undercurrent to all of these policies and proposals: it is the belief that the well-being of the institutions of government is more important than the well-being of individual persons and an individual’s right to possess his or her own money.

Here’s hoping your team won this weekend. Now let’s figure out how to enable the American citizen to be a winner, once again.