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Costs are a problem for sure. But the biggest factor is the FED. They have slowly increased rates the past 1.5 years and have stated that they are going to incr

Costs are a problem for sure. But the biggest factor is the FED. They have slowly increased rates the past 1.5 years and have stated that they are going to increase interest rates further and pop the economic bubble. Not only that, Yellen has said the FED is going to shrink their balance sheet. Credit is drying up and becoming more expensive and will be for some time. All business activity will slow ( new or established ). And we'll get a recession soon. It's only after the recession, when the FED decreases rates and loosens credit controls that business activity will start to increase again.

lovich 9y ago
Should the rates be kept at 0 or near it forever? What happens when there's a recession despite the low rates, is the government supposed to pay banks to take their money? Some of your points can be argued for and I'd agree with them, but to put it out like the big bad government is just looking to turn off the economy is pretty disingenuous
- eighthnate 9y ago
  > Should the rates be kept at 0 or near it forever? Of course not. > but to put it out like the big bad government is just looking to turn off the economy is pretty disingenuous Where did I say this? Also, the FED isn't "the big bad government". They are a private corporation. Why do so many people on hackernews read into things and get defensive? Recessions are a necessary part of an economy. All I said was that the FED exists to pop bubbles via their interest rates. I didn't say it was good or bad. I was just pointing out why recessions happen.
  - lovich 9y ago
    Forgive me if I read into your comment incorrectly. To me it read as if you are stating that the fed increasing the interest rate at all is what is going to lead to a recession and that businesses won't be started until they lower the rate again, even though that rate is historically low. Also the Fed is not a corporation like all the others in the US. They are indepentish because they aren't answering on day to day basis to the political side of the government but they still ultimately work for the government
clhodapp 9y ago
I don't think it makes very much sense to blame the FED. See https://tradingeconomics.com/united-states/interest-rate https://tradingeconomics.com/united-states/interest-rate, which shows just how atypically-low interest rates currently are.
harryh 9y ago
The FED was far far too tight with money from 2008-2010 or so but it's not at all clear that they are right now. If you subscribe to NGP targeting they are in the right ballpark when it comes to interest rates.

lovich 9y ago

Should the rates be kept at 0 or near it forever? What happens when there's a recession despite the low rates, is the government supposed to pay banks to take their money? Some of your points can be argued for and I'd agree with them, but to put it out like the big bad government is just looking to turn off the economy is pretty disingenuous

eighthnate 9y ago
> Should the rates be kept at 0 or near it forever? Of course not. > but to put it out like the big bad government is just looking to turn off the economy is pretty disingenuous Where did I say this? Also, the FED isn't "the big bad government". They are a private corporation. Why do so many people on hackernews read into things and get defensive? Recessions are a necessary part of an economy. All I said was that the FED exists to pop bubbles via their interest rates. I didn't say it was good or bad. I was just pointing out why recessions happen.
- lovich 9y ago
  Forgive me if I read into your comment incorrectly. To me it read as if you are stating that the fed increasing the interest rate at all is what is going to lead to a recession and that businesses won't be started until they lower the rate again, even though that rate is historically low. Also the Fed is not a corporation like all the others in the US. They are indepentish because they aren't answering on day to day basis to the political side of the government but they still ultimately work for the government

clhodapp 9y ago

I don't think it makes very much sense to blame the FED. See https://tradingeconomics.com/united-states/interest-rate https://tradingeconomics.com/united-states/interest-rate, which shows just how atypically-low interest rates currently are.

harryh 9y ago

The FED was far far too tight with money from 2008-2010 or so but it's not at all clear that they are right now. If you subscribe to NGP targeting they are in the right ballpark when it comes to interest rates.