Quote:
Originally Posted by Slava
Its not that cut and dried regarding interest rates though. We've seen high borrowing through the late 2000's and rates were cut. The reality is there are a lot of factors that go into the central bank setting the overnight rate. There are obviously drawbacks to increased borrowing, and I'm not denying that, but 21% overnight rates isn't a definitive outcome either.
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The bold is referring to post 2008: first of all, the spending was economic stimulus; second, it was expected to be temporary; and third, it was in an environment of heightened risk of deflation.
VERY different than reckless government spending.
And I never said we are heading for 21%, I said higher interest rates. It doesn't take rates rising a whole heck of a lot before massive government debts, and high personal debt loads become a devastating problem.