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I disagree. If we raise interest rates, we can finally kill wasteful consumer and government spending. We need increased savings for productive asset creation, and we also need prices and wages to fall.

However, this whole argument is moot. We won’t be able to rely on Chinese imports much longer anyway, due to our ongoing inflation. The unemployment situation will not be solved until we have a real economic recovery.

"If we raise interest rates, we can finally kill wasteful consumer and government spending."

The only way to kill wasteful government spending is to elect people of good character. Irresponsible politicians won't care what the interest rate is or even if they have to promise that your children will pay it back in gold.

I'm not sure I'd consider consumer spending "wasteful" especially what is left of consumer spending after the last few years. And I don't think it's something you want to kill either. When the economy is at full employment, then you can let interest rates rise. Letting them rise now with 25% unemployment would only result in more personal, business and government bankruptcies. It would be ridiculous.

"We need increased savings for productive asset creation, and we also need prices and wages to fall."

There's plenty of cash sitting on the sidelines looking for safe investments. We need investment opportunities and that's only going to come from getting people employed again. And we don't need prices and wages to fall. We don't want to be China. Free trade with China is making us like China. That's what we need to reverse.

We don't need to be competitive to sell to the Chinese. They aren't going to buy from us anyway. There is only one buyer and that is Americans. So why are we letting Chinese sellers compete against Americans, when Americans are the only ones buying.

"We won’t be able to rely on Chinese imports much longer anyway, due to our ongoing inflation."

We'd have to see a lot more inflation than we are seeing to make a dent in the wage differential with China. They aren't going away anytime soon, unless we make them go away.

"The unemployment situation will not be solved until we have a real economic recovery. "

Which we won't have because we are too busy exporting our remaining jobs overseas. Stop the exporting, bring the jobs back to America and we will have a real economic recovery. Jobs ARE the recovery.