Discarding that this article is about Fed's nominal rate and instead discussing the general topic of market interest rates. Another reason for higher market in

Discarding that this article is about Fed's nominal rate and instead discussing the general topic of market interest rates. Another reason for higher market interest rates is it's a forcing function on entrepreneurs to make them think harder about what they spend social resources on. Think of it this way with an interest rate of 0* , you merely need to trade a dollar for a dollar in order to service the debt. Many would be entrepreneurs will pursue ideas which have an EROI in the [0-1]% range just because they're expected to return _something_ . However this deploys many societal resources that marginally keeps them from better ideas, should they simply wait or innovate longer. If interest rates were, say, 5% then entrepreneurs must find ways to increase resources by 5% at a minimum just to service the capital. I think this is part of why we've seen so many shitty ideas come from startup over the years. Because a net 0 outcome has minimal repercussions . Yes obviously everyone wants to be a billionaire, but thinking of every gamble having a spectrum of outcomes, it means a gambler can continue to gamble on lower payouts if the "rake" is much lower. * Consider all of this net of inflation and mandatory minimum returns etc. so that we can speak simply about interest rates.