But as MMT notes, this policy is deliverable with interest rate control using QE and the regulation of rates on central bank reserves which in combination can guarantee zero effective interest rates in near perpetuity. Low interest rates are fundamental to a strong economy.

Someone should go tell Ergodan. He’s been printing money, keeping interest rates low, the lira just fell 40% and generally everyone thinks there’s going to be the most almighty crash…..

6 thoughts on “It does?”

  1. I’m trying to work out what the incentives would be to lend at zero effective rate of return. I certainly wouldn’t do it with my money.

  2. I long for the day when Potato sets up a hedge fund and stops this endless flow of stupidity and ignorance. Won’t someone disconnect his electricity?

  3. I should have thought that the experience of the last 12 years is that low interest rates create zombie economies. There is no incentive to try to improve your rate of return. Bad companies are allowed to stay in business. Inefficiencies are not driven out

  4. BiS: I suspect the incentive is that if you don’t lend, the government will steal it. They may steal it anyway by not paying back the loan when the repayment is due.

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