4 ms·
And perhaps the answer is to make borrowing more costly and saving more profitable through higher interest rates.
by MisterMower 5y ago
And perhaps the answer is to make borrowing more costly and saving more profitable through higher interest rates.
- imtringued 5y agoI'm not sure how higher interest is supposed to help them. According to your logic, payday lenders are doing poor people a favor. If you asked people 20 years ago they would say compounding interest that massively exceeds inflation is evil. Nowadays people are worried about low interest being a problem because of their wholly incomplete model of economics that doesn't even address unavoidable natural monopolies like location. The land market is inherently inefficient. That fact was papered over by high interest rates. Instead of paying the landlord huge sums, you paid the banks huge sums. Now that interest isn't going to the banks it's going to the landlord again. The solution is obvious. Tax monopoly rights with a pigovian tax. The mythical free market in consumer goods only exists because of well written property laws. The mythical free market in land doesn't exist because the existing property laws are written extremely poorly.