Discussion
Hi there
Thanks for this… Honest question though.
In Brazil interest ratea are insanely high and historically everyone says this is to benefit speculation, particularly through public debt titles (probably not the right translation).
It is also something that screws over the poor because if you owe something to the bank or credit card, it is a lot heavier to pay.
How can these to realities be true at the same time?
@subcomandantecarpincho @Elizafox @AnarchoNinaWrites
Yes, because poor people are not buying assets or other investments with the loans, they are buying essentials.
@duckwhistle @subcomandantecarpincho @Elizafox Also, as another poster pointed out - your mortgage is not a prime rate loan.
Think of it this way - the rich guys are not the banks, everyone here is at the end of the day ripping off the little guy - but low interest rates let the rich guys essentially keep more of the plunder, while the bankers get less. Either way tho, you're getting bled dry.
@AnarchoNinaWrites @duckwhistle @Elizafox
Okay, thank you for your answers.
I am really not sure this is the case though, that lower interest rates in themselves benefit the wealthy. Maybe this discount rate is US specific? Then maybe this precisely is the problem?
What I know for a fact is that for decades all of the radical left in Brazil presents this argument, that the public debt payments are essentially the rich robbing the poor through high interest rates and that one of the things we should do is lower them.
From economics classes, the gist of it is that the interest rate being low means more real-economy investments (opening businesses for instance), high interest rates mean more speculation and this would be a monetary policy tool to halt inflation.
@subcomandantecarpincho @duckwhistle @Elizafox Yeah well, 50 years of neoliberalism has demonstrated that your economics textbook is full of shit.
I'm not particularly interested in arguing reality as it is unfolding however, given that I just gave you a direct real world example of how this is working RIGHT now and has worked for every waking moment since the 08 Financial crisis.
I guess we'll have to agree to disagree. Good day.
@duckwhistle @subcomandantecarpincho @Elizafox For example, take the Paramount merger that's going on right now. That merge is possible because the Ellisons can pile on an astronomical amount of debt, which is of course credit, they are buying a whole multi-billion dollar network on spec. Low interest rates make that possible, high interest rates make that deal a loser. I'm sure SOME bankers want to make more on the loan, but MOST rich ppl want to be like the Ellisons, cause they're not bankers.
@duckwhistle @subcomandantecarpincho @Elizafox (to be clear Duck, I'm responding as much to the original question as your post - I realize you know this stuff already or you wouldn't have posted what you did to summarize it)
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