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Article: High anxiety. (low interest rates reflect economic stagnation) (Editorial)
- Article from:
- National Review
- Article date:
- September 6, 1993
CopyrightCOPYRIGHT 1993 National Review, Inc. This material is published under license from the publisher through the Gale Group, Farmington Hills, Michigan. All inquiries regarding rights should be directed to the Gale Group. (Hide copyright information)
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Hardly a day goes by when President Clinton does not boast that his economic program is already a great success because interest rates have hit a twenty-year low. The President insists that what is driving down interest rates is the prospect of lower budget deficits. But wait: if lower deficits cause lower interest rates, then someone needs to explain why we now have record low interest rates at exactly the same time we have record high deficits. And why is it that in the 1980s the deficit steadily rose and nominal interest rates steadily fell? Paradoxically, recent evidence suggests that, if anything, low interest rates correspond with high deficits. Despite this stubborn ...