Raghu Rajan in a blog post and Project Syndicate column titled Money Magic raises the other important issue with respect to low interest rates.  The first, as I have been harping on, is that cheap money for banks is hurting the economic recovery by the resurgence of a new bubble in commodities that lowers discretionary income.  Arguing in the same manner as Bill Gross that extended low interest rates work as a tax on savers, especially elderly risk averse bond holders, and thus reduce their income without providing any positive economic impact in return.  Companies are sitting on cash and individuals are still deleveraging.  Just goes to show what a confused mess we are in.  I know why don't we borrow the money from ourselves, or just conjure it up like the banks, and invest it by providing public goods, jobs, training and infrastructure improvements and the basis for long term growth.  Wait we can't do that the debt ceiling is falling, never mind the fragile recovery of the economy or our faltering ecological system.