Econ Comments & Analysis
Fortune | America's economic enemy: Super-low interest rates
The Federal Reserve wants to reduce unemployment, but low borrowing costs could translate to more debt.
Real Clear Markets | Monetary Policy Was Born Out of a Mistake
Modern monetary policy as it is conducted operationally was born out of a mistake, discovered by accidental action. One of the primary doctrines of the early Federal Reserve System was that it needed to be self-sufficient, thus no taxpayer funds were to go to its support. Each individual reserve bank thus needed a manner in which to accumulate "earnings" to pay staff and cover operational costs. To do so required the reserve branches to hold a portfolio of securities in which they could "earn" interest in sufficient quantity as to hold to that early doctrine.
Fortune | The problems with debt-hungry banks
Highly leveraged banks pose risks to the financial system, but policymakers could ease the problem by reforming tax policies favoring debt over equity.
