The U.S. needs jobs. The jobs outlook is bad and deteriorating at a rapid clip in the U.S. 0% interest rates and massive government spending and taxpayer funded bailout of Wall Street won't do a damned thing to fix what ails us. Show me a poor, unemployed person who buys a big ticket item because the interest rate is low (aside from the obvious exception of a fraudulent transaction. J.O.B.S. No one is talking about this as the systemic problem that ails our economic system.
Do interest rates need to be low in order for ordinary citizens to be more willing to borrow? Or do they need to be low so that companies are more inclined to borrow? You are right about jobs though. It isn't so much the amount of jobs, but the types of jobs available. People with masters degrees working as cashiers at Wal-mart? I don't think things have ever been quite that bad.
Of course it needs a working banking system. The only thing the gov't needed to do was raise FDIC limits on deposits - not hand out trillions in pledges and direct infusions of taxpayer $$$ to deathly sick banks. There are healthy banks in the U.S. that are responsible. All this money Paulson is allocating is being wasted. Vaporized. This is the worst policy and implementation of economic policy I've ever know of in this country. 8 trillion in bailout funds and pledges at last count... In the interim, manufacturing activity in the U.S. is at the lowest level since 1942. Good luck with all that.
Liberia has 85% unemployment rate... http://www.factmonster.com/ipka/A0107718.html Compared to them, we are doing great.
FDIC is part of the problem - it allows depositors to avoid thinking much about healthy vs sick bank by using taxpayer money as a backstop for all banks, equally. This is a de facto punishment of sanely-run banks. And that's *bad*. If FDIC isn't eliminated entirely, it should be reduced significantly, to perhaps the $10k level. And it needs to be made clear that uninsured deposits are just that - UNINSURED.