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To: zonder who wrote (150236)11/18/2002 12:45:16 PM
From: Oeconomicus  Read Replies (2) of 164684
 
The problems I have listed that go with lowering interest rates are not "remote potential dangers". They are risks that are thoroughly studied and documented. They are risks you take when you lower interest rates, which is in fact why the Fed does not often lower them.

You have mentioned essentially two risks of lowering rates - inflation and over-stimulation (encouraging excessive debt), which is only bad in that it might lead to inflation.

But we are talking about current fed policy, not monetary theory and you haven't said anything that might support the case that current fed policy has made inflation anything more than a remote risk. The greater risk at this point is that a too tight monetary policy would result in a second dip or worse, extended deflation.

Now, since you offered your "expert" opinion, how WOULD you improve US monetary policy at this time?
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