GROWTH AND JOB CONSEQUENCES: The Irony of the EU Deal - WSJ.com

The Irony of the EU Deal - WSJ.com

You may not have much of an economics background - but, think who is setting interest rates? In the US, it is clearly the Fed. And, both those with money (including retirees) and those who would borrow (other than government and super-sized corporations) are facing government engineered and dictated regulatory obstacles.

So, put the blame where it belongs - and, that is 'government' and regulators.

Market prices should reflect the value to you or me of deferring consumption and saving for a rainy day; and, the value to people with new ideas for a business or investment of borrowing money. That would be the clearing price for different types of saving and investment and borrowing and equity instruments.

All is distorted.

My favorite example to think of is the UK one with a 50% tax rate. Suppose an entrepreneur wanted to borrow 5 million pounds. The bank would lend it for 5 years.

To pay the bank back the principal, the investor would have to earn 10 million pre-tax to get 5 after-tax.

Add to this some additional risk factors for the need for a higher investment return, etc. and you can see what happens to growth.

I'd say blame government and those who think social spending doesn't have growth and job consequences.