Do Low Interest Rates Depress Economic Growth Over the Long-Term?

The conventional wisdom around the world is that low interest rates are conducive to higher economic growth, while higher interest rates reduce economic growth.

This is certainly true. We see it consistently: economic recovery begins when interest rates get slashed, and recessions begin when interest rates get too high. It’s the way the global economy has worked for many decades now.

But here’s the thing: GDP growth rates across the developed world have been decreasing for decades. Here’s the US’s annual GDP growth rate going back to 1948, with a trend line, overlaid with the baseline US interest rate:

You can see from the trend line that GDP growth is consistently slowing down over time–and interest rates have been in longterm decline since the early 1980s.

Each economic recovery since the 1980s is weaker than the last. The 1990s economy was stronger than the economy of the 2000s, but not quite as strong as the 1980s. And all three decades were stronger than the 2010s, economically.

I expect the 2020s to be even weaker than the 2010s were unless something significant changes.

It’s not just in the US where GDP is in long-term deceleration. Look at Japan, where annual GDP growth is trending lower over the longterm:

For the past decade, the Japanese economy has barely even been able to stay above zero! The 1990s were a lost decade for Japan. The 2000s were better than the 1990s, but not by much–and they were way weaker economically than the 1980s was. The 2010s in Japan was the weakest economic decade yet in terms of annual growth rates, with the economy barely able to stay above water the whole time.

But here’s the thing: interest rates in Japan started falling in the mid-1990s and have been at or near zero for basically the past 20 years!

If low interest rates spur economic growth, why is that not the case in Japan over the long term?

The Eurozone’s chart doesn’t go back as far as the US’s or Japan’s, so you can’t see how much worse the past 20 years have been than the 20 or so years preceding 2000, but you can clearly see slowing economic growth rates dating back to the mid-1990s, coupled with steadily decreasing interest rates:

GDP trend line down, interest rates down.

We see it all over the developed world: low interest rates and slower and slower economic growth over the long-term.

They have to be related, right?

I mean, sure, there are other factors that could possibly explain it. One is automation making workers irrelevant–at least this is what we’re told. I’m a bit skeptical of this, though, as technological progress has been disrupting the economy for centuries. Think of the late 1800s, before the invention of the automobile, for example: how many jobs back then that simply ceased to exist once cars were invented?

Disruption and innovation are constant features of the economy, and yet they have never resulted in mass permanent unemployment and economic stagnation.

Another possible factor is the developed world’s turn away from manufacturing through the process of offshoring it to places like Taiwan, China and various other developing Asian nations.

But here’s the problem with that: while yes, the US has done a considerable amount of offshoring its manufacturing sector, and the manufacturing sector in terms of its share of GDP has been cut by more than half from about 28% in the 1950s to around 12% today, Japan’s manufacturing sector today represents about 18% of its economy, and their economy is even more bogged-down than ours.

Certainly the decline of manufacturing in the US has been a bad thing, in my opinion. We need to begin re-shoring our manufacturing and start building things again. But we should not be under the impression that doing so will reinvigorate the economy and reverse the long-term trend of slowing economic growth. Manufacturing was in decline well before the 1980s and 1990s.

In other words, you can’t explain away the long-term slowing of GDP by pointing to declining manufacturing. It’s not a sufficient explanation. And neither is automation, which has been a constant factor going all the way back to the industrial revolution over 150 years ago.

There has to be some other explanation for the longterm slowing of economic growth in the developed world observed over the past 30-40 years. And I think the explanation is low interest rates.

The simple reason: debt. Lower interest rates mean more debt.

And the more debt there is, the more debt that has to be paid off, which means income–corporate, government, personal–is diverted to making interest payments, which essentially contributes nothing to the economy (other than it pays the salaries of people who work at banks).

It’s a matter of opportunity costs: we’re spending money on interest payments (again: corporate, government and individuals) that we could be spending on other, more productive pursuits.

Sure, you could say that the debt-enabled spending was an economic boon (this is most often the case with corporate debt when it’s used to fund expansions, R&D and the like). but this still does not mean that people, corporations and governments aren’t burdened by debt and the interest payments they must make on that debt.

US Federal debt just passed $30 trillion this week. It has increased massively over the past two years–nearly $6 trillion, from what I gather. As a result, the US government presently spends over $540 billion a year on its interest payments. That is a ton of money. It’s about 2.5% of GDP. And that’s not even counting state and local government interest expenses.

Couldn’t all that money be put to better use somewhere else?

American households also have a ton of debt today. The average household with credit card debt (i.e. most households) pays over $1,000 a year in interest payments alone. That is an enormous drag on the economy in the aggregate from an opportunity cost standpoint. I’m not going to say it’s a complete waste of money, but it’s damn close. It doesn’t really boost the economy. It boosts banks’ bottom lines, and enables the banks to give out even more loans to trap people in debt.

All this debt and all these interest payments on that debt has got to be having a negative effect on economic growth, right? I’d say so.

However, you might argue that it’s not low interest rates and the debt they encourage people and governments to rack up that are causing GDP to slow over the long term–it’s lower birth rates. And it’s true that birth rates worldwide have been in decline since at least 1950, with developed nations seeing the biggest decline in birthrates:

As a result, the world’s population has been growing at a slower and slower pace with each passing year:

The world population growth rate was more or less stable from 1950-1990, but since 1990 it has been in decline. If present trends continue, the world population will be contracting in size by the early part of the next century.

Again, this is most pronounced in the developed world.

So it makes sense: declining birthrates, declining population growth rates, and increasing average age equal slower economic growth. More people equals more economic growth.

If you have one guy and he does $100k worth of “work” per year, and then you add a second guy and he does $100k worth of “work” per year as well, then you’ve just increased your GDP. It’s a very basic concept; more people, more economic growth.

I don’t think anyone would deny that declining birthrate leads to slower economic growth.

But I’ll just to throw this out there: what if low interest rates contribute to lower birth rates, and thus slower population growth?

How? Because interest rates affect something that is extremely important when it comes to the birth rate: housing. People are more likely to have bigger families if they can afford bigger homes. It’s a basic concept: as your family expands, you need a bigger home.

But if you can’t afford a bigger home, you will probably be hesitant to have more kids.

Per the Case Shiller home price index, homes in the US have gotten significantly more expensive since 1987:

And we know interest rates have gone down quite a bit over that same time period, too: low interest rates = worse housing market.

This might seem counterintuitive, because lower interest rates mean it’s easier for people to get loans and buy homes. So you’d think low interest rates would mean higher birth rates because housing is more accessible for people. They can get low-interest loans and buy homes.

But as we can see from the chart, in the era of falling interest rates, home prices have skyrocketed. This is a simple matter of supply and demand: lower interest rates increase demand for houses, and when demand increases, so does price. Plus, with low interest rates, people start treating real estate like the stock market: as a way to flip assets and make money. This only increases demand for housing even more.

We can see that nowadays, houses are as expensive as they have ever been going all the way back to 1890. This is longterm data from Case-Shiller, and it’s inflation-adjusted:

And this chart stops in 2018. Housing prices today are considerably higher than they were in 2018 (as you can see from the chart above this one), and in 2018, they were already extremely high. Real housing prices are as high as they’ve ever been in US history.

If we look at the above chart, we can see that in the 1960s and 1970s, real home prices were ~110 on the Case Shiller index. Today, in 2022, the Case Shiller index is over 250 (two charts up). This means real housing prices in this country have more than doubled since the 1960s. Again, this is inflation-adjusted data! It is today almost 2.5x more expensive to own a home as it was in the 1960s and 1970s.

In fact, it is now twice as expensive to own a home as it was as recently as the late 1990s.

I think you have to point to steadily declining interest rates as the reason for the increasing unaffordability of housing, which in turn leads to lower birthrates.

Now obviously there are many notable exceptions to this, like the typical trope of the massive immigrant family with 8 people crammed into a tiny home somewhere in a big city.

But you can’t deny that increasingly unaffordable housing does not have an effect on families’ decisions to have more kids.

And it doesn’t just affect families’ decisions to have more kids–it affects people’s decisions to even have kids in the first place.

Just the other day, the Daily Mail reported that in the UK, the average age of women having their first child hit 30. In the 1970s, the average age of a woman having her first child was 26.

In the US, the average age of a woman having her first child increased from 21.8 in 1970 to 26.8 in 2017.

This is because people are getting married later nowadays. Today, the average age of a man getting married is 30, and for women it’s 28. But back in the 1950s, it was 23 for men and 20 for women. Even as recently as the late 1970s, it was about 23 for men and 21 for women.

Now, you can attribute this partly to women joining the workforce over the past 70 years or so (in 1950, 71% of the workforce was male while today it’s 53%) and putting off having kids, but wouldn’t you think this would have the effect of boosting economic growth? Just by virtue of the sheer increase in size of the workforce with women added to it, you’d think GDP would be growing faster, not slower.

But the problem is, if population growth is slowing, then the economy is going to inevitably suffer. With a declining birthrate, productivity has to keep increasing in order to maintain the same level of output.

Adding women to the workplace may increase the size of the labor force, but it also causes women to put off having children, which over the long-term is bad for the economy. And women who put off childbirth until their 30s tend to have fewer kids. I mean, 90% of a woman’s eggs are gone by the time she hits 30. Women are not meant to put off childbearing until they’re in their 30s.

Now, there are obviously other factors behind declining birthrates. You’ve got abortion (“family planning”) and the widespread availability of contraceptives. You’ve also got online porn wrecking the love/dating lives of millions upon millions of guys. And I’m sure the unhealthy food we eat nowadays is poisoning men and reducing sperm counts. And don’t forget pesticide and chemical runoff in the water supply, for example, atrazine, which has been shown to severely affect the reproductive systems of aquatic and amphibious animals that are exposed to high levels of atrazine in their ecosystems.

But I think the single greatest impediment to people getting married and having kids is the fact that it’s so expensive to do so nowadays. Young people are saddled with loads of student debt (regularly $100k, often even more than that, and sometimes much more than that) by their early 20s. Homes are more expensive than ever.

It’s just harder than ever to start a family nowadays, and it’s mainly a money problem.

Young people want to have kids. According to the New York Times from 2018, the average woman wants to have 2.7 kids, but the average woman only will have 1.8 kids. It’s not that people don’t want to have kids. In fact, according to that same article, the number of kids women are now saying they want to have is at the highest level since 1975.

It’s just that many people can’t afford to have kids these days. When you look at this chart, which shows you the ideal fertility rate as expressed by Americans, and the actual fertility rate, what stands out about the past 15 years or so is that it’s the only time over the past 40-50 years or so where the actual fertility rate and the ideal fertility rate were moving in opposite directions:

From 1970 to about 2008, it was pretty clear that when ideal fertility went up, actual fertility went up. And when ideal fertility went down, so did actual fertility. When people wanted to have kids, they had them. When they wanted to have fewer kids, they had fewer kids.

But nowadays, that’s not the case. People want to have more kids, but they’re actually having fewer kids. There is now a large disconnect between the number of kids people want to have and the number of kids people actually are having. Those trend lines are moving in opposite directions, which tells us that declining birthrates are due to factors outside of the average person’s control.

It has to be a financial thing, right?

Again, while it would seem that lower interest rates are the solution to this problem because they make it cheaper to get a loan, over the long-term, I think low interest rates have created many of the problems we are now facing today because they have led to a massive price inflation in housing.

It’s increasingly difficult to find nice, affordable homes today. You can find plenty of nice homes, and there are affordable homes out there, but there are not many nice and affordable homes. And this is because due to low interest rates, housing prices have skyrocketed.

A nice, suburban home suitable for raising a family that in the past would have been within reach for someone in their 20s is now completely unaffordable. So young and first-time homebuyers are having to settle for smaller homes. They’re just not getting bang for their buck anymore.

And honestly, we don’t even have to try to prove the argument that high housing costs lead to low birthrates, because we could just argue that skyrocketing housing prices are what’s putting a damper on GDP. The people who can afford to buy a home are drowning in mortgage debt, which means they have less to spend on goods and services–the things that make GDP grow.

Now, you might counter and say the housing market is included in GDP, so if the housing market is going up then it’s good for GDP. But as we can see, GDP has been in decline and we’re now on to our second housing bubble of the past 20 years. Plus, home sales aren’t counted in GDP. Only new home constructions are counted.

So whether or not you accept that high housing costs equal lower birthrates, it’s pretty apparent that no matter which way you slice it, low interest rates are bad for the economy in the long run.

Low interest rates do two things to individuals, directly, as I see it:

  1. Increase housing prices: Low interest rates increase demand for homes, which in turn increases the price of homes.
  2. Increase stock prices: You can’t sock your money away in a savings account and make interest off it anymore, so you have to put it in the stock market. And this is not just your average joe–it’s the average joe’s pension, which is part of a massive fund that has been parked in the stock market. The fact that stocks are the only game in town juices up the price of stocks and has a tendency of giving way to stock bubbles.

The net effect of these two things is that the rich get richer and income/wealth inequality increases. Because the rich benefit the most from rising stock prices and rising home prices.

And when stocks crash, which they always have done anytime there’s been a bubble, sure it hurts the rich as their net worths are reduced by cratering share prices, but it doesn’t destroy them. And they have plenty of cash on hand to buy the dip during a crash.

But for the average boomer joe who has his money in a pension fund, he’s in serious trouble if the market tanks. Imagine some guy in his early 60s or late 50s back in 2007, smiling as he looks at his pension account balance and seeing $800k. He knows he’s going to be able to retire comfortably soon. But the market has other plans, and by 2009 his pension is only worth $350k.

Stock bubbles, when they ultimately collapse, are way worse for the average joe than they are for the wealthy One-Percenter.

Same with housing bubbles. When Joe Boomer’s house drops in value from $650k down to $350k, he’s devastated. And he can’t take advantage of low housing prices to invest in real estate because he only has one home.

But the rich One Percenter, he can afford another home to add to his real estate portfolio. He loves housing bubbles. It allows him to buy and sell homes like he would stocks–plus, he can start generating rental income from his properties. Nowadays, he doesn’t even have to rent it out long-term; he can probably make more money listing it on Airbnb. It’s more lucrative.

And it’s all enabled by low interest rates.

But we haven’t even talked about the effect of low interest rates on corporations yet: this is another hugely important factor here.

Corporations take advantage of low interest rates to take on cheap debt, which enables them to expand and, eventually, buy up other companies. This consolidation of the market leads toward monopoly control, where huge, powerful companies increasingly dominate.

This chart is a bit outdated, but it illustrates my point, and I’m sure it’s even worse today: the number of public corporations in the US has basically been cut in half since the mid-1990s, yet the market cap of those companies has increased:

The accompanying article noted that assets in the US economy are highly concentrated: in 2015, 35 corporations accounted for half the assets of all public corporations, while in 1975, 94 firms did.

Monopoly and oligopoly lead to economic stagnation, because, simply, they have no real need to compete and innovate. They’ve already cornered their respective markets.

It has all been enabled by low interest rates.

For a long time, I always wondered, “Why not just keep interest rates at zero all the time, and only hike when there’s inflation? Why shouldn’t interest rates be zero as often as possible?”

I mean, it does make sense. If the Fed controls interest rates and can make interest rates whatever it wants, what good reason is there for the Fed to make interest rates, say, 5%?

Well, I understand now. Low interest rates lead to tons of problems.

Low interest rates also lead to inflation. I didn’t talk about inflation much because the focus of this post is about the long-term, and inflation has only recently become a problem. But inflation may well be the worst consequence that can come from low interest rates. We’re seeing it right now.

And this leads me to the final point, which is probably the most concerning of all: the fact that we are seeing inflation right now means the Federal Reserve is going to have to hike interest rates. They have no choice. The Fed is mandated by Congress to get and keep inflation under control.

This will make it harder for people and institutions with debt to make their interest payments. They’ll have even less disposable income than they already had. Inflation is doing a number on Americans’ finances because it means they have to spend more on essentials like groceries and gas. And now they’re about to have to spend more on interest payments, too.

This is probably going to lead us into a recession. In fact, it seems like we’re already heading into one and the Fed hasn’t even hiked interest rates yet!

If we go into recession this year with interest rates at zero or just above zero, it means the Fed really can’t do anything to try to reboot the economy. Normally they cut interest rates to do that, but if rates are at zero or 0.5% or 0.75%–and if inflation is still high–the Fed simply won’t be able to cut rates. You can’t go lower than 0%.

And so this is another problem with very low interest rates: the Fed loses a lot of its ability to reignite the economy after it goes into recession. For decades, people around the world have grown used to the central bank responding to a recession by cutting rates. But with rates already at 0%, central banks can’t cut rates anymore.

Certainly the Fed has other “tools” at its disposal, like money printing (Quantitative Easing, or QE), but if inflation is still running wild, the Fed will not be able to commence QE again. It’d be counterproductive.

And so I really think that this time, the Fed may just be at the mercy of the markets. It won’t be able to intervene and arrest the decline in the economy, as well as in the stock and housing markets.

As we’ve gone over, there are plenty of reasons low interest rates are counterproductive, but for the Fed specifically, a big reason you don’t cut interest rates to zero and keep them there is because in doing so, you leave yourself no slack to cut rates in the future.

Plus, all that debt that was racked up at ultra low interest rates becomes a massive liability for the whole economy once rates start going back up.

The longer you keep interest rates low, the harder it is to ever raise rates again purely because of all the debt that has been accrued as a result of the prolonged low interest rates. You can’t hike rates because a lot of the people who went into debt at low rates (which includes the government and the large corporations, along with the average joe) are going to get destroyed.

And this is the theory on why, despite an obvious association with slowing long-term GDP growth and so many other negative consequences, central banks continue keeping interest rates low. Because they can’t hike rates. They’re trapped. There’s simply too much debt that will explode when rates go up.

If they allow the economy to go through a full deleveraging, it will be very painful and might last a long time–think years, possibly even a full decade, like the Great Depression.

But all central banks are really doing in continually bailing out the economy is kicking the can down the road and delaying the pain. Eventually when this thing blows up–and it’s possible that it’s in the early stages of doing so now–it is going to be devastating. It’s going to be worse than 2008 because the Fed won’t be able to cut rates. They will not be able to rescue the economy the way they usually do, which is by cutting rates to shorten the recession.

You see it after every recession of the past 30 years: the Fed cuts rates, the economy recovers. They cut rates in the early 1990s recession, they cut rates in the 2001 recession, they cut rates to rescue the economy in 2008, and they did so in 2020 when Covid and the lockdowns hit.

But now, with the economy slowing and interest rates at zero, the Fed cannot cut rates any further to rescue the economy. It cannot be the safety net for the economy that makes recessions less severe and business expansions last longer. The Fed is going to just sit there and let this thing play out. And it’s going to be brutal.

Again, we also have inflation happening as well, which means fiscal stimulus and QE are out of the question. The laws of economics will be be in charge, and policymakers will be largely powerless to stop it.

The deleveraging will happen whether they like it or not. The asset bubbles will be popped whether they like it or not.

People have been predicting this for a decade-plus now, but I think now it’s finally going to happen, and the reason is because of inflation. Inflation means the Fed’s hands are tied. When the Fed has to choose between boosting the economy and taming inflation, it will choose to tame inflation.

We don’t need to guess here. It is not some great mystery whether or not the Fed will hike rates into an economic slowdown: they will. They have already done so in the past.

It happened in the early 1980s when inflation was sky-high: Fed Chairman Paul Volcker jacked interest rates up to 20% to get inflation back under control even though the shock of such high rates in a short period of time devastated the economy.

The way the Fed sees it, preserving the stability and viability of the US dollar is of utmost importance, even if the actions taken to do so utterly ravage the economy for several years.

The economy can bounce back. But if inflation really gets out of control and wrecks the US dollar, you can’t come back from that. Well, more specifically, the ruling elites won’t be able to come back from that.

The conventional wisdom is that the Federal Reserve has a “dual mandate” to promote both full employment and stable inflation, but in reality, inflation is top priority for the Fed. They just can’t admit it.

But they’ve shown it in the past. We know it’s the truth. All you have to do is look at what happened during the early 1980s. It is undeniable: the Fed’s #1 priority is keeping inflation under control, even to the point of letting the economy fall into deep recession.

The Fed will certainly be accommodative and promote economic growth with low rates and QE when possible–i.e. when inflation is under control. But when inflation becomes a problem, inflation becomes the priority. It takes precedent over the health of the economy.

The dollar is the lifeblood of the American Empire. Understand?

You have to think like an American oligarch here.

What is more important to you: a bunch of average joes losing their job, or the stability of the world’s reserve currency? The dollar takes top priority over all else. They will not allow inflation to destroy it because the dollar is the source of their power.

If the dollar is destroyed, the ruling class are destroyed. It’s as simple as that.

Sure, a severe economic recession will cause mass unrest and potentially lead to political violence, but they have no choice here. They have to take their chances.

Stabilizing the US dollar takes precedent over everything.

People are wrong in thinking the Fed always has their back and won’t let the stock market, the housing market, and the economy collapse.

People are wrong. The Fed has your back until inflation becomes a problem. Then the Fed no longer has your back, and in fact will destroy you financially in order to save the dollar.

The dollar takes precedent over your stock portfolio. Got it?

The stability of the US dollar is more important to the Fed than your precious 401k. People need to understand this.

The official inflation figures right now may read 7%, but the Fed knows the real number is higher than that. If inflation today were calculated the same way it was calculated in 1980, the inflation number would show over 15% right now.

Do not be fooled here: the Fed is alarmed right now. It is now about to end QE, hike rates, and begin unwinding its balance sheet all within a period of about 3 months. That is an extraordinarily hawkish pivot in a very short amount of time.

The last time the Fed turned hawkish it took 3 full years between the time lifted interest rates from zero to the time it began unwinding its balance sheet (2015-2018).

Now it’s happening in 3 months. That should tell you how seriously the Fed is taking inflation right now.

Your portfolio does not matter to them. Seriously, just research the early 1980s recession and Paul Volcker and it will become crystal clear to you that the dollar is the Fed’s top priority. The US economy is its second priority.

Pull out a dollar bill. What does it say up at the top?

It says “Federal Reserve Note,” doesn’t it?

The Fed is going to protect the integrity and stability of its dollar above all else, including your stock portfolio.

Plus, the Fed has let the market inflate into a bubble and then burst twice in the past 20 years: the Dot Com boom, and the 2008 Crisis.

You think they won’t let it happen again?

And so I believe this period of low interest rates will soon come to an end, at least in the US, because of inflation.

Even in the EU, which is seeing inflation as well, it’s possible the low rate policy regime is coming to an end. Just yesterday, the European Central Bank announced it would consider hiking rates this year. The ECB is generally way more dovish than the Fed, and last year said it was extremely unlikely they’d hike in 2022. Now they’re changing their tune after seeing the inflation data.

Japan’s inflation rate is still very low, so don’t expect them to begin hiking rates anytime soon. But eventually, they will have to.

I don’t know if we’re going back to a period of “normalized” interest rates in the 4-6% range on average.

Nor am I 100% certain that doing so would be a boon to the economy. I think it would take a long time to reverse all the negative side-effects of 35+ years of low interest rates.

And we will have to go through an incredibly painful economic bust in the near term once rates are hiked.

But what I do know is that low interest rates have been incredibly destructive for both the American economy and the average American for the past 35+ years.

As goes the famous axiom of economics, coined by a man named Herbert Stein in the 1980s:

Anything that can’t go on indefinitely, won’t.”

The laws of economics–like the laws of gravity–take over.

Permanent low interest rates are unsustainable, and I think we are now, after more than three decades, hitting the point where that has become apparent.

The great myth of our time is that the Fed has figured out how to keep the economy–and asset prices–growing indefinitely.

There’s always some great lie that takes hold of people during every speculative mania. In the late 1920s before the Depression, it was the “New Era” and stocks had reached a “permanently high plateau.”

In the early 1970s, there was a prevailing belief that “Nifty Fifty” stocks were great bargains no matter how high the price, because the underlying companies were so wonderful.

During the Dot Com Bubble, the belief was that tech stocks were not subject to traditional metrics like earnings and valuation. There was no price that was too high to pay for tech stocks.

In 2006-2007, the prevailing belief was that housing would never crash, and in fact that it could never crash.

Now the belief is that the Fed has solved the business cycle and that assets will never decline again.

This, like all the rest, will be disproven, and in spectacular fashion.

You are about to see what happens when we enter a recession and the Fed can neither cut rates or print money. Fiscal stimulus isn’t happening either, as Republicans are about to take over Congress and they will not be able to come to an agreement with Biden over a fiscal stimulus package. Plus Republicans seem to actually care about inflation (at least they say they do).

The economic correction that the federal government has been putting off for decades now is finally going to happen. They will not be able to mitigate it. They will just have to let it run its course, at least for a few years.

And like a cleansing fire it will pop the asset bubbles and serve as a reckoning for nearly all unsustainable economic activities and behaviors.

Part of me wonders whether it was all by design to saddle the decrepit and senile Joe Biden with this massive, decades-in-the-making economic and financial reckoning—like running up and eventually maxing out a dying man’s credit cards.

Who knows?

But the collapse of all this unsustainable economic activity is going to happen, and it’s going to be devastating. Housing will crash, stocks will crash, people and corporations with lots of debt will go bankrupt.

It’s going to happen. And it’s ultimately because our government fell for the temptation of low interest rates.

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