Keep Interest Rates Down

(Aired on February 25, 2010)

The federal government is walking a fine line between success and disaster as we try to recover from our faltering slide in late 2008 and most of 2009. There are indications that interest rates will start to rise this summer, and although I am not some kind of financial guru, I can tell you right now that if that happens, we will head right back down the slippery slope we so recently started to climb up.

With personal debt at virtually record levels, and many people overextended in their personal lives, raising interest rates will make personal bankruptcies soar. They're already up some 27% this year, as people try to make it through tough times. To raise interest rates further will be disastrous. U.S. financial boss Ben Bernanke made the same comments yesterday. He's worried that if interest rates rise, the U.S. economic recovery will fail, and we all know what that means.

I am in favor of what the government is doing regarding putting new rules in place that will force people not to overextend themselves. Rules for purchasing homes that will restrict the amount of money that can be tied up in mortgages are badly needed. Many have been tempted to stretch themselves far too much to get into a home with low interest rates, and they've put themselves in trouble. To raise interest rates to stop that is not the answer. Education, and new rules to prevent that problem make much more sense.

There is concern that if inflation rises, higher interest rates will be needed. But from what I've been able to determine from the experts, rising interest rates will bring on way more problems than they will fix. Let's hope the government sees the light, and keeps interest rates low until we get out of the quagmire.