By the way, artificially setting interest rates is a good thing. I mean, granny can't live off the interest of grandpa's investments anymore, but we'll just come up with a Social Security or Medicare expansion that will cover her costs once she's burned through all their life savings.
Then you can conveniently stick her in a home so her children aren't burdened by her expenses.
@adam The reality is that people don't buy homes based on an interest rate. They buy a home based on the payments they can afford each month. Sure, the rate has an impact on those payments, but this goes directly to the complaint that "you shouldn't buy more home than you can afford!"
Well, a lot of supposed #conservatives say you shouldn't borrow money, either. So, higher rates means most will borrow less, and be in less debt.
@adam Ultimately, the banks will have to lower interest rates if fewer people can afford loans at higher rates. It's a business decision for banks to take - take on more risk by issuing lower rates or risk becoming niche by only catering to increasingly wealthy clients?
@adam Most Americans are economically ignorant - taught in Government schools.
When you add that ignorance to the inherent survival instinct to maximize your own benefits, most people are incapable of the second-order thinking required to look to the next step and downstream implications of actions taken today.
Interest rates should float with the market.