Should the Federal Reserve allow interest rates to rise ?

[Wiregrass Willie]

Alan Greenspan says ---

Left alone, he said, the Fed's policy-making body, the Federal Open Market Committee, can keep inflation between 1% and 2%, but that could require forcing interest rates to double-digits, a level "not seen since the days of Paul Volcker," his predecessor as Fed chairman. "I fear that my successors on the FOMC, as they strive to maintain price stability in the coming quarter century, will run into populist resistance from Congress, if not from the White House," he writes.

http://online.wsj.com/article/SB118978549183327730.html?mod=hpp_us_whats_news

What's wrong with allowing the interest rates to rise ? Some of the most prosperous days of our recent history were those with high interest rates. I realize that with lower rates Corporate America is able to squeeze a few extra cents profit out of every dollar -- but look at the housing bubble it caused.

[DemocratSinceBirth]

1. No

Higher interest rates would act as an across the board tax increase without exemptions for poor folks who are least able to afford it...

If you read about the great populist movements of the nineteenth century the demand for cheap money was always at their core...

[ProdigalJunkMail]

2. low interest didn't CAUSE the housing bubble

it allowed stupid people and greedy banks to CAUSE it...aside from that, I don't think rising interest will do anything but put further hurt on people...corporations can weather that storm...people with adjustable loans and creditcards...well...maybe not

sP

[DemocratSinceBirth]

3. It's A Tax Increase...Those That Have To Borrow Will Just Pass The Cost Along

Plus it would cause a recession...

When employment hit 10.8% during the Reagan recession in 1982 Paul Volcker was keeping interest rates high to wring inflation out of the system...

[Roland99]

4. But instead of the money going to the gov't it goes into the hands of the top banks.

yay.

[DemocratSinceBirth]

5. The OP Didn't Define What High Interest Rates Are...

Presumably if they were high enough a depression would ensue...

[ThomWV]

6. What on earth makes you think they will have any choice?