Posted on 04/27/2025 10:28:46 PM PDT by Angelino97
Writer may as well shout at clouds.
>> It is certainly reasonable to argue that an economy addicted to easy money could use lower interest rates.
and there you have it — the contemptible sentiment against the struggling working class — the necessary aggregate of financial costs that manifest throughout the whole of the supply chain ultimately inflicting pain upon the dependent, “addicted” consumer
He missed possibly the most important reasons.
The interest costs on the Federal Debt.
No, he didn't:
The U.S. is already paying more than $1 trillion per year just to service its debt.
That’s not necessarily so. We had very interest rates for well over a decade, and very low inflation at the same time. Inflation kicked into high gear mainly from the Covid response (shortages) and government handouts and spending. Inflation kicked in for manufacturers at the start of pandemic, but they were able to keep prices mostly steady due to subsidies like PPP loans and the $600 bucks a week per person. But houses and cars and durable goods prices went through the roof. Then out of the pandemic we printed trillions more for “inflation reduction” and “green new graft”. Totally irresponsible.
Anyway, I think Trump sees several things. He thinks the economy is slowing faster than the fed realizes. I think he is right. He also is engaged in trade negotiations that will be disruptive for a relatively short time. He is shaking up the world but I really do think he has a plan and is doing it for a larger reason than just “fair trade”. He is using this as cover for a lot of other negotiations going on. He’s got their attention. Oil prices are way down, which means demand is down (or supply too high but that makes little sense with Russia and Iran both on embargo). I’d like to check Rush Limbaugh’s “corrugated cardboard” price index. If corrugate prices are down that means there is less shipping going on. Finally he wants more investment in the USA. Having lower rates will push cash to investment instead of to bonds. Why take a risk with cash if you can get 5% guaranteed return (or higher). Reagan taught us that taking rates down from 15%+ got us back to investing into startups. Trump wants to do the same, but staring from a lower base. Not to mention Europe and other places are already cutting. Switzerland is on its way to negative rates. We have to stay competitive.
Correct. Trump in his first term wanted to sell 30, 50 and 100 year bonds. He wanted to lock up US debt at fixed rates for a long time. That would have brought some stability.
So now the Dems are gonna protest for high interest rates? Brilliant!
Exactly.
Yet throughout my many decades of consuming conservative and libertarian media -- talk radio, opinion journals, internet -- one of their most consistent themes has been that easy money leads to government printing, spending and inflation.
This year US will have to refinance $9T in debt.
The general consensus of Alcoholics is that the solution to their problems is to get another Bottle to drink.
“we printed trillions”
↑ That right there ↑ is the number one reason.
Cutting interest rates wont hurt a thing, so long as we continue to cut gubmint spending.
Rate cuts aren’t inflationary, printing money out of thin air and spending it is.
Trump should cut taxes ASAP.
In a nutshell: cheap money without Congressional pro-growth policy changes = inflation + bad news for savers.
“He should be careful what he wishes for, because he is begging for more inflation.”
Inflation is a means for everyone with money to give some of it to others that need help. It’s not a bad idea when a country is going through a transition and some suffer more during the transition. The flip side of inflation is that the government gets money to help them out.
“Rate cuts aren’t inflationary, printing money out of thin air and spending it is”
Rate cuts -> banks lend more money because it is cheap -> creation of new money -> inflation
Money is literally created by bank lending (look up fractional reserve banking).
By definition, it always increases money supply. If it doesn’t show up immediately as inflation (we live in a complex system, and there are other things that affect inflation), it will eventually.
I disagree.
Government money printing not bank lending is the problem.
Trump’s first term before Covid is the model we should move to...low interest rates, good growth, low inflation.
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