3 ms·

I'd even invert that bit about coming from the future. Due to the aging demographic shift and the otherwise impossibility of saving on a generational and nation

I'd even invert that bit about coming from the future. Due to the aging demographic shift and the otherwise impossibility of saving on a generational and national scale, there's a huge demand to encumber future earning potential for goods and services today. This is fundamentally why interest rates are so low - our aging population demands to be owed goods and services when they've retired, and the only way to provide that is to convince people to provide it in the future (ie, take on debt).

URSpider94 10y ago
It's not just our aging population. It's also a side effect of running large trade deficits with developing nations. China's entrepreneurs generate huge profits, and they want to invest them somewhere safe. In terms of default risk, investments in the USA are about as safe as your mattress, and pay about the same interest ...
ArkyBeagle 10y ago
Or, of you prefer ( as I do ) government debt is a hedge against future GDP growth. The population may be aging but people are working longer. And in an economy with feeble monetary velocity, entitlements to old folks has pretty high relative velocity. Low interest rates are less about entitlements than they are about attempting to restart consumption. The problem is that low interest rates encourage dinking around with M&A activity rather than investing in productive enterprise that might employ people. This leads to high private sector debt levels, which further suppresses wages. The "winners" are just sitting on mounds of cash and having trouble finding outlets for it.