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> Define "too low". The world is awash in capital. You defined it in the next sentence. Capital should be the judge of prospectuses - i.e. of ideas to implemen
by H8crilA 7y ago
> Define "too low". The world is awash in capital.
You defined it in the next sentence. Capital should be the judge of prospectuses - i.e. of ideas to implement in the real world. When there's too much capital there's no judge (i.e. it's not really capitalism any more).
All bubbles are a consequence of too much money and too much credit/faith in something.
- throwaway34241 7y agoIf the Fed is already often failing to achieve their target inflation rate, wouldn't raising interest rates cause them to undershoot it even further and lower investment / set off a recession? I think their point is that while it's arguable that rates are too low, congress needs to change fiscal policy for them to be able to raise rates, so it's unfair for the Fed to get all the blame here. They're using the policy tool they have to execute their mandate and the other (maybe better) policy tools are out of their hands.
- toomuchtodo 7y agoCorrect. These are fiscal policy problems, not monetary. The Fed is helpless with the tools they have while Congress needs to act.