Professor Elam

Lowering interest rates will not rescue the economy if no one borrows, no lenders lend, and no one wants the risk of debt anyway. However

let's suppose you have one million dollars in the bank and want to retire. 

Three percent interest rates means you can make $30,000 a year. Swell!  the environmental crowd has wanted Americans to consume less, they are now getting that wish !

So it looks to me like many baby boomers are going to be working for a long long time.  

And, if one takes social security, and the threshold to get it keeps going up in age, then one is taxed on the social security benefits if one makes above a certain level of income.  government wants more money to help folks don't you know and so the tax revenue dog keeps chasing its tail. 

Now many businesses are laying off workers. Let's take a simple view of the economy. Unless I am wrong there must be more people in the private sector working to support government than there are in government living off the rest.  And no matter how you slice it, taxes support government. And that would be local schools, counties, airports, states, and the Fed govt. 

How many layoffs will occur before we have as many in govt as we have in business?  This is already happening in California, New York City, and cities like Philadelphia. 

The Post Office just raised the price of stamps about 4%. No one is being laid off at USPS. Yet the volume of first class mail has surely shrunk as we all use electronic mail now.  FED EX and UPS are laying off, why not the Post Office?  

THe municipal bond market is falling apart. This is debt owed by local governments.  As property tax revenue falls and no one is laid off, local governments start to look like Las Vegas casinos, most of which will probably end up in bankruptcy. By the way, Trump TRMP casinos went bankrupt. Local governments have, like the casinos, assumed that property tax revenues always go up, ditto for sales tax revenue. Now that is not happening, no wonder they want a Washington hand out.   but where are local governments cutting payroll by actually cutting salaries. Preventive defensive action would require that now, not trying to fix the problem later as the City of San Antonio is now doing. 

For a look at how this is playing out, read about the Bank of America restructuring plan.