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Midwest | The eighties had extremely high interest rates which sucked profits dry if you had any sizable short term debt. A business does not have that much profit if its equity is modestly low and the interest rates are 16%+. I would fault the government a little bit here because the policy was to compete with private borrowers for money to run the government. It could have been solved easily by either increasing taxes a little bit or expanding the money supply. Today the policy is to print money which has kept rates low but also made the value of our currency low. Having said that, I think the real danger is with farmers inability to service long term debt with breakeven incomes. | |
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A difference between now and the Eighties
