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Originally Posted by menotakoala
You're forgetting that the banks are lending out money that won't be paid back. So the banks suffer and they go out of business and then everyone's screwed. And then that's when the government takes over then everything goes to $#!+. The real way to stimulate the economy is to lower taxes. And if the feds want to control this inflation that we have, they need to raise interest rates. Because of inflation you need more dollars to compensate. From what I can tell, you're all up for lower interest rates but that causes an even higher inflation. Is that going to help spending? I think not. Everything you buy is more expensive.
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Banks going out of business??...lol, there was just an article in the paper last week saying how Banks were thinking about keeping current interest rates, despite the Bank of Canada planning to lower the prime rate, because of how they lost money from what's been happening in the States...then it went on to point how all of the 5 major banks have posted well over 2 BILLION dollars in profit...yeah, those poor bastards will be out of business in no time...:biggrin:
You're of course assuming that people don't pay their bills...but if interest rates go up, then people currently at the limit, won't be paying anything, it'll mean bankruptcy and the very thing you're worried about. if the interest rate goes down, then that means people at the limit now have some extra cash...and if they're smart they'll use it to pay down that debt that much faster.:wink:
Lower taxes would always be a good thing, but realistically do you ever think that will happen??
Inflation depends on a lot more then just interest rates, like fuel prices, wages, stricter environmental controls which can add costs to manufacturing, etc.