Originally Posted by Literature
If a small business takes out a line of credit at their bank, what is their payment rate based on?
Low rates will have to go up again, but it's not because that will make groceries cheaper.
And therein lies the problem, Jenson. All this talk about helping the middle-class and all that is bunk as long as the $ stays at these low levels. Plus there are all other sorts of bad consequences that go with it.
Right now the biggest tax break you could give to all americans without touching the tax code is to strengthen the $ to the price at the pump and grocery store come down. People will spend that extra money and business will be more than happy to pay a little higher rate.
Lower costs of borrowing only make sense when there is a reason to borrow. If I own a business and I have less and less people walking through my door, I don't care how low rates are, I am not going to increase my borrowing because there is no driving need to do so. That was the problemw ith Obama's approach when he tried to make it easier for businesses to borrow for new equipment. If they are seeing a drop off in sales, why would they borrow more?