| JUST LEARNING - 4/20/2017 18:08
I'm not going to disagree but there's a few flaws with the thought process.
If rates go up it would be a net loss to our government. The small gain of ss interest would be far offset by the interest paid on debt.
Congress or any other government official doesn't control interest rates, they are controlled by the federal Reserve. High interest rates would hurt the rest of our economy so it's not on the agenda of the government.
One other thing is high interest rates will favor those who already own land. Those who don't have land will probably not be in position to borrow 15% money. Once prices fall land returns will increase bringing more investment buyers.
Deficit spending will exist regardless of interest rates. The SS fund is something that cannot be raided, and will not be funded by anything other than individuals paying in directly. It is a benefit for the people directly funded by the people. It IS NOT general revenue such as income tax.
If you think the Federal Reserve is completely insulated from politics that's how it is supposed to be but I disagree. But you have the original intent of the Federal Reserve correct.
I specifically said 15% was not a good target. Half that would be plenty. The rate of return would NOT go up because rents would probably go down along with values with higher interest rates. Were there a lot of investment buyers in the 80's? |