A thing that makes me nervous is that, for ages, the Fed never successfully re-raised interest rates because the market panicked every time they even mentioned it. But if things go badly, lowering interest rates isn't even possible...
@cwebber maybe the market panicked because they knew it would result in inflation, which would force wage increases, and they're not that interested in wage earners making a bigger piece of the pie. If the market panics, I see that as a good thing. We just need the fed to be unafraid of it.
@cwebber I think that it's probably not that purposeful, but the lower interest rates do help keep inflation lower, which helps those with cash keep it. I think that we've now shown inflation can be too high and too low.
@ted I agree there re: inflation
@ted Whoa wait I just re-read what you said... I somehow misread it as the opposite.
FWIW yes I agree that the fed should re-raise interest rates regardless of nervousness, because if the fed rate being low is what "kept us here" that's not good either...
my main worry is we should have done this 3 or 4 years ago!
@ted Yeah I'm not sold on that...
I think as shitty as Keynesian economics are, at least it was a system that could be turned to when everything went nearly off the cliff entirely in 2008. But the kind of recovery method used in the last decade is a short to medium term recovery mechanism, and if you stay on that medicine it's not going to work next time...