2009 Budget defict: +$2 Trillion

[Debaser82]

Quote from laminustacitus:

Putting the interest rate below zero would be an even graver folly than the ultra-low interests rate now. The interest rate needs to be high enough to entice individuals to save so that there's funds in the loanable funds market for investments. If there's still investment without the savings to support it, then its unsustainable in the long term and must eventually be liquidated, leading to yet another recession.

But all the banks are bankrupt.

How can banks reward savers when they are bankrupt?

 

[ehorn]

I.O.U.S.A

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[laminustacitus]

Quote from Debaser82:

But all the banks are bankrupt.

How can banks reward savers when they are bankrupt?

True, but its nothing that a zero interest rate will make better. Those banks that cannot reward savers don't deserve to exist.

 

[talknet]

Quote from Debaser82:

But all the banks are bankrupt. How can banks reward savers when they are bankrupt?

Quote from laminustacitus:

True, but its nothing that a zero interest rate will make better. Those banks that cannot reward savers don't deserve to exist.

I think, the printing cost of $100 bill is 10 cents. If the banks are suffering losses then central banks can always "print money" to pay interest to depositors. Central Banks have the monopoly of printing money.

Central banks are just increasing the "money supply" when there is no actual "sales demand".

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