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Of course it's a complicated situation, but interest rates are at extreme lows. Doesn't that mean we have headroom there to combat inflation?
by whateveracct 5y ago
Of course it's a complicated situation, but interest rates are at extreme lows. Doesn't that mean we have headroom there to combat inflation?
- Hsvakd 5y agoNo, because then the interest rate on the deficit would go up. And if the interest rate on the debt goes anywhere near where it used to be … kabbooie
- cmrdporcupine 5y agoRaising rates would hurt working class people in other ways. Make unaffordable mortgages even more unaffordable. Make their debts harder to carry, etc. Screwed either way.
- frankydp 5y agoShort answer is no. That tool is not as effective as ecos think. There are lots of global examples of its ineffectiveness. Borrowing has little real world impact on market forces, because most market activities are not debt driven, primarily growth is debt driven.
- arrosenberg 5y agoMuch of the working poor are already living on credit mechanisms. If you control inflation by raising the cost of borrowing, the bottom falls out. The right way to combat this is to tax the wealthy (who accrued most of the inflated cash and value) and take the money out of the supply, but Congress is allergic to that.
- deleted 5y ago[deleted]
- imtringued 5y agoI honestly think that unless something akin to a war happens interest rates will stay low. 2% at worst. This isn't because "government bankrupt" or whatever. It's because that is what happens when you live through 80 years of peace with almost no major conflict. We don't need to grow up because we are already adults. That kind of thing. So yeah tax that money out of the economy. Maintain trust and peace.