Economy Question

Question: How does it help our economy for our government to borrow money from China and use it to lower interest rates in an attempt to persuade people to borrow even more money to buy even more stuff that was made in China?
Update – What I am trying to say is, loosening credit does not help the average person. If you can’t afford something, buying it on credit doesn’t help you afford it. Who you need is higher wages, health care, etc. Then you can afford things.
This is a solvency crisis, not a liquidity crisis. Predatory capitalism harvested the consumer, ate the consumer, shat out the consumer, and loose credit isn’t going to revive a consumer that has been through that.

2 thoughts on “Economy Question

  1. Addressing supply, without addressing demand, is simply pushing on a string. And as you point out, demand can’t increase as long as the lower and middle classes are financially strapped, jobless, or simply fearing for their jobs.
    Unfortunately, simply putting more money into the hands of the lower and middle classes won’t work because the legal system would then steal it from them and give it to their debtors (“bankruptcy reform”), therefore leaving no more money in the hands of the lower and middle classes than was there to begin with. It has to be a top to bottom effort involving eliminating using the legal system as a method for predatory credit card lenders to rape and plunder (i.e. re-instate bankruptcy as an escape if a predatory credit card company suddenly raises their interest rate from 10% to 30% thereby making it impossible for you to pay), increasing wages and real incomes for the bottom 80% of the population across the board, and increasing employment for everybody.

  2. Oh, BTW — very little of the current money driving Treasury yields to 0% is Chinese money. Mostly it’s money under management for wealthy individuals and retirement plans, who are fleeing to safety because they no longer trust the stock market or other investments. If they weren’t parking it in Treasuries they’d just be taking it out of banks and stuffing bushels of greenbacks under their beds, but parking it in Treasuries is a bit easier, logistically, than hauling bales of greenbacks around. 0% interest either way though.

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