> At risk of stating the obvious, the entire point of such interest rates would be to strongly prod the market (mostly the very wealthy) to spend and/or invest

> At risk of stating the obvious, the entire point of such interest rates would be to strongly prod the market (mostly the very wealthy) to spend and/or invest their cash rather than sit on it. "The rich" aren't sitting on cash, they're sitting on assets. It's the banks that are supposed to be punished for "sitting on cash" instead of lending out every last nickel twenty times over. The entire economy runs on cheap credit and "the rich" benefit by buying up the assets whose prices inflate as a result of it. If that cheap credit dries up, the result will be a massive recession. Politically, interest rates must remain low at all costs. > But the same thing could be accomplished by a much more conventional means: taxation and public spending. No, it couldn't. The amount of money you can get from taxation is small compared to the money you can make appear magically in the economy through monetary policy. Almost the entire money supply is debt.