Posted on 12/31/2008 6:20:56 AM PST by TigerLikesRooster
German finance minister warns against 'growth bubble'
Tue Dec 30, 11:01 am ET
BERLIN (AFP) – Germany's finance minister told AFP in an interview that cutting interest rates too low in an effort to counter the global recession could create what he called a dangerous "growth bubble."
Speaking earlier this month, and fresh from his recent broadside against the British government's response to the economic crisis, Peer Steinbrueck said there was a danger of repeating the dangers of the past.
"On the one hand we need to boost the economy, on the other hand we must make sure that a policy of cheap money does not lead to a new growth bubble founded on credit, as happened after September 11, 2001," Steinbrueck said.
"It is therefore important that the focus, at least in Germany, be on sustainable investments in infrastructure and less on consumer spending financed by debt," he told AFP.
"This is also an argument against hasty tax cuts," he said.
(Excerpt) Read more at news.yahoo.com ...
Ping!
The low interest rates was a big part of the problem. Keeping them low will only make things worse.
Cut taxes, cut spending and reduce the size of government.
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