1. Without government intervention, interest rates are almost always too high.
2. This is the principal reason that humanity still remains mired in poverty.
3. There is no good reason for interest rates to have been so high throughout human history, a few periods excepted, or to continue to be so high.
4. Government can and should bring interest rates down to a more reasonable level.
5. Fears of government intervention and of a government-engineered increase in the amount of money circulating in the economy are ill founded.
6. If the government reduces interest rates, the ultimate target level should be “zero.”
7. Should the government ever reverse gears and deliberately raise interest rates? No.
8. It was fear of the boom that led the US Federal Reserve to raise already too high interest rates in the late 1920s. This led directly to the Great Depression.
9. Economic booms should be welcomed, not feared. To think otherwise is a “serious error.” 23
10. Inflation is an “evil,”27but it is unlikely that a boom will lead to “true inflation.”28
11. In the rare event that full employment does arrive, there are better remedies than “clapping on a higher rate of interest.”33
12. Progressive income taxes, in which the rich pay a higher and higher tax rate, also help to reduce economic inequality:
13. If the government prints a great deal of new money and injects it into the banking system, interest rates should fall. But if they do not fall enough, other measures will be required to boost investment.
14. For now, national governments must take the necessary actions to bring interest rates down and keep them low. Eventually, global institutions might assist in this task.
15. We should pay our respects to the “army of heretics and cranks”41 who in earlier periods argued for lower interest rates.