Interest rates and the economy

  President carter presided over some of the worst economic conditions in the united states. His biggest concern was tackling inflation. Thus interest rates were in the double digits to help reduce inflation. But such measures were terrible for the economy.

  In contrast, interest rates were reduced to the single digits under president reagan. The national debt was tripled during reagan's 8 year term however the economy improved remarkably because of it. Lowering interest rates help reduce the cost of borrowing. Whether that borrowing is to fuel the IT bubble or the real estate bubble. Without lowering interest rates, people just would not have money. Without a national debt, people just would not have money.

  In case people do not understand. Interest rates are set by the government. Private sector does not create money, only the government can. The only things the private sector can create is fractional reserve lending, shares and equities, and goods and services. But they still cant create money. No private sector is able to create wealth. Only the government can.