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That's an interest point, all the articles have been discussing negative rate as an extreme measure that's meant to be temporary without justifying why. Maybe
by analyst74 8y ago
That's an interest point, all the articles have been discussing negative rate as an extreme measure that's meant to be temporary without justifying why.
Maybe negative rate is a better solution than wealth tax.
- andrenth 8y agoIt’s extreme because it reverses a basic economic principle (money is more valuable now than later). You lend me $100 today and I pay you $90 in one year. The idea is to force people to let go of their long term saving goals and spend now, because saving will make you lose money, thus making the economy grow. It doesn’t seem to work as predicted though (countries doing that aren’t growing). Furthermore, people with access to other types of investment will just switch instead of spending their money. In the end I believe this works as a sort of stealth taxation that affects poor people the most, because they don’t have access/knowledge/risk tolerance to more sophisticated forms of investment.