Draft report of the US fiscal commission

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Originally Posted by Lewkowski

GGT low interests rates = gas for the economy (and bubbles/inflation) while high interest rates put the breaks on the economy (and also fights inflation). Sure there a bazillion other variables but all things being equal that is what occurs with the Fed setting interest rates. If it costs less to borrow money more people will borrow money and more goods are purchased, more capital investments are made ect ect.

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An economy based on credit debt, and bubbles? All things are not equal. Neither are manipulations.

The Fed wants to encourage borrowing money, so consumers will buy goods on credit, because we've got a consumer-based and debt-based economy. But that's exactly why we're in our current quagmire. In essence, they're working from the top down, favoring trickle down profits from lenders to borrowers. But they've conflated small business operators (who need temporary borrowing to make pay roll or pay workers with commercial paper) with all the millions of small consumer buyers. That's just stupid. They're punishing both the small business and the small buyer, and in the end, it's only the huge conglomerates that benefit from these low interest rates.

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Now weather or not the Fed *should* set rates and create market distortions is another matter...

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Whether is not weather. Than is not then. Just a couple of things that do matter, when words matter. ;)

Low interest rates means small businesses get loans with lower interest rates...I have no idea how you come to the conclusion that small businesses want high interest rates.

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Originally Posted by Loki

Low interest rates means small businesses get loans with lower interest rates...I have no idea how you come to the conclusion that small businesses want high interest rates.

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Reading comprehension isn't your specialty, is it? :donkey: