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.
Tea It UP!!!
Three cheers for the Tea Party. Hip Hip! I was reminded recently of an acquaintance who like me was socialized deep in the heart of movement conservatism. He maintained his love of all things Republican while I had moved on. Still we would see each other occassionally and always enjoyed debating the current trajectory of public policy. Then around 2005 he said, "You know I am really more Libertarian than Republican." And we proceeded with a discussion of what this high school career counselour thought it meant to be a libertarian. Well, since then he has voted for democratic candidates including a presidential vote for Obama. My point is that true Republican or movement conservatism leads down the road to libertarianism and ultimately anarchy, really. As Egan points out once the reality of what that really means becomes apparent, as it has, no former actor turned California governor can spin it any other way. Rand Paul's victory is huge because he bypassed the ou...
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