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> and those who are, aren't paying anything worthwhile. That is the entire goal of interest rate tightening. To impoverish the masses until much lower wages ar
by ZoomerCretin 2y ago
> and those who are, aren't paying anything worthwhile.
That is the entire goal of interest rate tightening. To impoverish the masses until much lower wages are finally considered "worthwhile."
Look at the incredibly strong and quick knee-jerk reaction in 2021 to enhanced unemployment schemes as soon as the vaccines went out. Employers wanted to hire at the same low rates of pay, but couldn't find enough workers of sufficient quality, so all levels of government treated this as a policy emergency: they cut unemployment, they cut food stamps and many social programs, they lowered the legal age at which you can work at all, work dangerous jobs, and work overnights, and the Federal Reserve illegally defied its mandate to maintain full-employment first, and then a *3%* inflation target when it jacked rates up very quickly.
- ericd 2y agoIt’s largely to slow lending and credit creation. They’ve got a difficult balancing act to perform, especially since cheap money is a lot more politically popular than the alternative, partly because many people focus on the part where the higher rates makes their debt more expensive, or that it causes lowered employment, like you seem to be. And maintaining low rates also does things like raise asset prices, as people borrow more to pump up their leverage and returns, people spend more, companies make more, and they hire more, people make more, etc, and people generally feel a lot better about that than austerity/saving/laying low. Unfortunately, it also leads to a lot of malinvestment, where people work on a lot of ultimately useless stuff, and that tends to make countries long-term poorer than being more prudent.