Who Decides on Money, The President or the FED? – We Hold These Truths

“This week, the Federal Reserve likely will vote to cut interest rates — when it should be raising them. If the economy is so dependent on low interest rates that a near-record-low rate of 2.4 percent isn’t low enough, there is something wrong with the economy, and piling on more cheap debt will make the crash that much harder,” and “Since the financial crisis of more than a decade ago, America and the world have gotten dangerously addicted to debt. The Fed has fed the addiction.”

She concludes: “The Fed (roughly speaking) sets the interest rate at which banks can borrow. The lower the rate, the lower the rate at which banks will lend to homeowners, credit-card borrowers, car buyers, and the like…In 2008, as the financial system was failing, the Fed pushed its key interest rate down to zero and kept it there for seven years. The point was to get people spending again. Since they had little discretionary income, they couldn’t spend more unless they could borrow more.”

“The more significant problem created is that cheap debt got the economy into trouble in the first place. By 2008, after a decade during which interest rates were also low, people had already borrowed so much that they couldn’t borrow any more. Household debt had nearly doubled between 2000 and 2007, to $14.2 trillion from $7.2 trillion. Choking on mortgage debt, in particular, Americans cut off their spending.”

Source: Who Decides on Money, The President or the FED?We Hold These Truths

About SARTRE 4368 Articles
"Populism" best describes the approach to SARTRE's perspective on Politics. Realities, suggest that American Values can be restored with an appreciation of "Pragmatic Anarchism." Reforms will require an Existential approach. "Ideas Move the World," and SARTRE'S intent is to stir the conscience of those who desire to bring back a common sense, moral and traditional value culture for America.

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