[zxcvbn4038]

They really painted themselves into a corner with the low interest rates, though I was never convinced that quarter basis point adjustments really made people magically withdraw money and go on a spending spree anyway. It always seemed more like a “we did something” placebo. Could just as easily be a ceremony where once a month the president goes to the treasury and pushes a big “Fix economy” button or maybe he’ll push the “Ruin economy” button, cue speculation and suspense.

[imtringued]

Interest rates can't fix a broken economy. Interest rates are like annoying parents nagging you to get a job, they accelerate an existing trend. If there are enough jobs then you will simply get a job earlier than you planned but you were going to get that job eventually. If there are no jobs then the only thing that changes is that your life is getting worse (=stagflation), not better, because your parents start hating you more and more.

Of course the government can always create jobs out of thin air through stimulation or a jobs program, but that's not the same thing as playing around with interest rates.