Posted on 10/14/2016 3:09:14 AM PDT by expat_panama
Low rates have zero benefit for ordinary business. Try going to your local bank and getting business loan. What you are really saying is that crony capitalists will demand their politicians keep rates low benefitting them and only them.
2. Higher rates will depress the value of heavily-leveraged assets like homes.
Bubble sectors like real estate will demand their politicians keep rates low for their benefit, continuing malinvestment and long term economic weakness.
3. With 93 million working-age people in the U.S. out of the work force and Baby Boomers retiring en masse, we're actually looking at a deflationary environment here in the U.S.
Leftist politicians (pretty much most politicians these days) will sign up to low rates to continue to fund bread and circuses.
And finally we come to your only legitimate reason that rates might stay low:
4. There is no need for foreign investors to demand a premium for U.S. government debt because...
Yeah, but you left out the CIA operations to support the same, the treasury and Fed collusion with other central banks to keep our rates low, and especially the expectation that the Fed will resume QE to continue their long term destruction of the economy (see malinvestment above) for the benefit of their political masters.
Yeah, those darned progressives.
You know, Paul, Reagan proved that deficits don’t matter. We won the mid-term elections, this is our due.
(January 9, 2004)
-—Dick Cheney
I am over 50. Have been hearing since I was first aware of politics in the 70’s how deficit spending posed an imminent threat.
Forty years and 16 trillion dollars later no one can see the threat. For sure these Millenial kids don’t. Until something YUUUUGE breaks globally the presses can keep printing dollars for as far into the future as the eye can see.
Most people can't, even tho just ten years ago O was saying that $6T in debt was a "failure in government" and "unpatriotic".
Thing is (like I was saying above) the problem's the interest payments. Sure, that's not a problem now either because we're paying no more now at near-zero rates what we were paying ten years ago at 6%. The math part (bear with me) is that when rates go back up (rates do go up too remember) then the payments will go up to. We're talking $trillions in payments. Huge spending cuts. Soaring tax rates.
Yes, after all they might be lucky enough to win the Powerball or Mega Millions for 400 million or more, or almost half a trillion. We all know a million doesn’t get you onto easy street anymore, it just means you can buy a bunch of toys that you otherwise could only dream about. 400 million though would most likely mean a life of luxury for at least decades!!!
“...but in real life, there isn’t any more money there.”
That, I don’t believe. I am thoroughly CONVINCED that the ONLY reason we haven’t gone Full Frontal Socialist as a Nation yet is BECAUSE Government hasn’t run out of Taxpayer Dollars. (AKA, ‘Other People’s Money,’ per Margaret Thatcher)
I understand your thinking, though. Individually, all of us Turnips feel that we ARE tapped out!
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