[dantheman]

Wouldn't it be better for congress to spend less? That's way better than raising taxes.

[mindslight]

That doesn't address inflation. The point is that money needs to be taken out of the system. That used to be done by high tax rates on high incomes, and the estate tax. Both have basically been neutered.

But all things considered, 5% is not really a high interest rate. People are just acting as if it's unreasonable because they'd become accustomed to ZIRP. Personally I hope rates stay above several percent for the foreseeable future, for climate/resource reasons.

[imtringued]

>Personally I hope rates stay above several percent for the foreseeable future, for climate/resource reasons.

I don't know what this has to do with climate or resource reasons. Cutting down the rain forest, polluting the planet with CO2 and sitting on interest payments are optimal in that scenario. Ultimately positive interest rates encourage corruption and short term thinking because earning money today ,no matter the cost, is better than earning money in the future.

Meanwhile with lower interest rates the future isn't discounted anymore and it is worth it to invest in emission reductions.

[dantheman]

Not spending takes it out of the system.

[mindslight]

I don't really know what you're try to say with this short blurb. Yes, money has to be taken out of the system via taxes and then not re-spent in order to successfully shrink the money supply. But compared with the current approach of creating new money and spending it, raising money through taxes for that spending will be an improvement.

Also focusing on executive spending is a bit of a red herring given how much outflow has occurred from the Fed itself over the past few decades via low interest rate loans. Basically rather than letting the gains from technology and offshoring accrue throughout society (via price deflation), or be spent purposefully (executive spending), the Fed has been squandering these gains to create an asset bubble.