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That, economists say, is the inevitable outcome of the nation’s ballooning debt and the renewed prospect of inflation as the economy recovers from the depths of the recent recession.
It is all very logical, but does not bode well for housing and job creation. Higher interest rates mean higher mortgage payments which will hamper real estate sales. High rates also discourage business investment which can slow job creation. What are our options?
It will allow for real, healthy businesses to continue, and weed out all of these crappy ones that are costing us billions.
Also, not everyone was meant to own a home. I rented for years, and just now bought a home this year. However, I had friends who went out and bought homes early. Now they are underwater, and in trouble. I know when I was renting, finding a house, in a decent neighborhood, for a decent price was hard. Thats because everyone owned those homes, even though many of them couldn't afford the payments.
Home ownership may go down, but rental prices will also drop as supply increases. That allows people to save money, and buy a home they need, not the one they want.
It will allow for real, healthy businesses to continue, and weed out all of these crappy ones that are costing us billions.
If interest rates go up, the only way it will cost us billions is in higher taxes to pay for the higher interest rates the federal government will need to pay on the national debt..
Extremely low interest rates are a contributing factor to 'bubble economies' like the one that burst in 2008. We need to employ more people and pay them more so they can purchase without borrowing the money.
Extremely low interest rates are a contributing factor to 'bubble economies' like the one that burst in 2008. We need to employ more people and pay them more so they can purchase without borrowing the money.
Raising interest rates is a means to slow down an overheated economy. I don't believe that we are currently overheating. Also, when I read comments that "we need to employ more people and pay them more..." I always wonder exactly who is the "we" that are talked about to do the hiring? Is this some magic fund that "we" will use to write out payroll checks? Or are businesses expected to pay more and hire because it is the the role of business? Let the not for profits do that with the money they raise from the few remaining taxpayers.
That, economists say, is the inevitable outcome of the nation’s ballooning debt and the renewed prospect of inflation as the economy recovers from the depths of the recent recession.
It is all very logical, but does not bode well for housing and job creation. Higher interest rates mean higher mortgage payments which will hamper real estate sales. High rates also discourage business investment which can slow job creation. What are our options?
The Fed kept the rates artificially low for way too long in early-mid 2000s and that was one of the main reasons for the mess we are in at the moment. Also, the current low rates discourage savings and investments in US.
Raising interest rates is a means to slow down an overheated economy. I don't believe that we are currently overheating. Also, when I read comments that "we need to employ more people and pay them more..." I always wonder exactly who is the "we" that are talked about to do the hiring? Is this some magic fund that "we" will use to write out payroll checks? Or are businesses expected to pay more and hire because it is the the role of business? Let the not for profits do that with the money they raise from the few remaining taxpayers.
However to continue to attract buyers of our debt, the rate will have to increase and sometime soon, and will need to increase with inflation and to reflect the national debt.
Maybe wrong, but think the 10yr will be between 5 and 5 1/2% by year end.
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