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Poor is a state of having low capital. Low interest rates make it hard for poor people to save their way out of being poor. Making it harder to accumulate capit
by meric 9y ago
Poor is a state of having low capital. Low interest rates make it hard for poor people to save their way out of being poor. Making it harder to accumulate capital keeps the poor being poor. That's why it's so expensive to buy stocks and housing at the moment. There's less ways for poor people to become less poor.
- marze 9y agoThere are lots of options to buy stocks without big fees, in small dollar amounts. Lack of good investment options really has little to do with poverty. Complex causes, complex remedies.
- meric 9y agoBut those stocks pay low dividends due to low rates. They are expensive stocks. High capital people can access the near zero rates to invest, the poor only have access to credit cards. At high interest rates it is expensive for both the rich and poor to invest. In low rate environment low capital people are at a disadvantage.
- TheCowboy 9y agoHow would higher interest rates change things? They're higher for everyone across the board. I suggest looking up nominal vs. real interest rates.
- meric 9y agoThat's like saying government price caps does not make it easier for people to buy goods. While true, price controls absolutely do have actual affects on economy. Typically supply is reduced from equilibrium and the economy is damaged; in paying low prices people have to wait on long lines. Except for cronies who have political capital to get all the goods they want at a low price. 'Nominal price' is different to 'real price' The same goes for interest rates. A cap on interest rates does not make it easier for the poor to buy homes and cars; in paying low interest rates people have to pay for much higher prices for homes. By giving up control of nominal interest rate, it would return to equilibrium and reduce capital inequality.