Clipmarks - cmstratton's clipmarks from July 14, 2008

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POPS Lowering Interest Rates Would Be A BIG Mistake

by cmstratton 7-14-2008

Everyone knows the economy is in trouble right now, but not raising, and even lowering interest rates would be a BIG mistake. Because of inflation, people are spending more and more of their budgets on basic necessities like food, fuel, clothes, etc. While lowering interest rates might keep mortgages more accessible and affordable, if inflation keeps rising, even if mortgages are down to 5% people won't be able to afford them, because all of their money will be going to their basic necessities. We need to curb inflation so that people can still afford to live in general, before we start worrying about keeping big ticket items like houses more affordable. And as far as banks go, isn't a free-market system supposed to allow some institutions that aren't performing or are making bad decisions fail? By continuing to bail some of these banks out that were making horrible decisions, you're just reinforcing bad behavior.