Quote:
Originally Posted by rubecube
Not really because you'd only start deficit-hawking if interest rates climb. A drop in GDP would mean more borrowing at hopefully lower interest rates. You're right that a drop in GDP that coincides with massive increase to interest rates would force cuts during a recession but that hasn't happened in the last few recessions.
|
I'm not sure most people realise how fast things go wrong when they go wrong, interest rates spike in a week or two when the currency craters, its not a slow process, its breathtakingly quick, there is no 'reaction' to it, you just wake up one day with no economy and most of your possesions are worthless, Governments are essentially powerless at that point