by George Leef
Economics professor Dominic Armentano discusses the long-run effects of Ben Bernanke’s policy of keeping interest rates as low as possible in this article. The effects are bad. The federal government gets to keep borrowing on the cheap to finance its wasteful ways, piling up debt that will eventually have to be repaid at higher rates from a weakened economy. We’ll also get more of the bubbles that have plagued us recently, since cheap money also supports unsustainable resource allocation in the private sector. We are looking at serious trouble just over the horizon.