On the heels of an article on the effect low interest rates have on savers, spenders and, yes, government, Coalition to Reduce Spending president Jonathan Bydlak wrote another letter to the New York Times:
Catherine Rampell’s recent article on the impact of interest rates (“As Low Rates Depress Savers, Governments Reap Benefits,” Sept. 10, 2012) gets it exactly backwards when it comes to the effect low interest rates have on government. Although it is true low interest rates allow government additional flexibility in paying its bills, low rates also makes it more difficult for government to live within the American people’s means. Low interest rates encourage government to borrow more, which merely increases the overall debt. Spending cuts and tax increases may be unpalatable, but only the former will address the problem of dangerous levels of government debt caused by habitual deficit spending. Low interest rates are therefore quite bad for responsible government.
President, Coalition to Reduce Spending
We keep thinking so we’ll keep writing, whether the Times likes our ideas or not.