Really simple, the Federal debt is denominated in terms of 3 month to 30 year bonds, when these bonds expire, the govt "balance transfers" by just making a new bond to pay the old back.
We currently have a lot of bonds expiring, and we have to sell all those new bonds at the Fed's arbitrary high interest rate, so it costs us more money in interest than if we had low or 0 interest rates.
Banks need to lend money. That’s how they function. If the prime rate is artificially high or kept high for too long then the market reacts and the cost of borrowing money is unattractive.
The USG borrows our money from the Fed and pays it back with interest. The lower interest rate benefits the USG while the higher benefits the Fed, as it is their “income”. It’s a fight over who keeps the money.
say you would need 300.000 @ 6%. That is 18.000 a year. Disregard paying off.
On top you have some CC debt say: 10.Grand @ 15%. Another 1500 a year.
Let's cut it to 3% and 7%. Instead of say 20K, you would pay 10K. 10K more money in your pocket to spent i.e. help to create jobs and new businesses, or ... lower your debt burden.
Really simple, the Federal debt is denominated in terms of 3 month to 30 year bonds, when these bonds expire, the govt "balance transfers" by just making a new bond to pay the old back.
We currently have a lot of bonds expiring, and we have to sell all those new bonds at the Fed's arbitrary high interest rate, so it costs us more money in interest than if we had low or 0 interest rates.
Banks need to lend money. That’s how they function. If the prime rate is artificially high or kept high for too long then the market reacts and the cost of borrowing money is unattractive.
The US government borrows a ton of money throughout the year.
The US government pays that interest rate, month after month.
The USG borrows our money from the Fed and pays it back with interest. The lower interest rate benefits the USG while the higher benefits the Fed, as it is their “income”. It’s a fight over who keeps the money.
say you would need 300.000 @ 6%. That is 18.000 a year. Disregard paying off. On top you have some CC debt say: 10.Grand @ 15%. Another 1500 a year.
Let's cut it to 3% and 7%. Instead of say 20K, you would pay 10K. 10K more money in your pocket to spent i.e. help to create jobs and new businesses, or ... lower your debt burden.
Times eh .... what 100.000.000 people?
Billions are easy.
Affordable housing & low interest rates!!
Lower interest rates to zero. Keep them there. Apparently it is so good for the economy theres no reason to ever raise them again.