High anxiety. (low interest rates reflect economic stagnation) (Editorial)

National Review | September 6, 1993 | Copyright

Hardly a day goes by when President Clinton does not boast that his economic program is already a great success because interest rates have hit a twenty-year low. The President insists that what is driving down interest rates is the prospect of lower budget deficits. But wait: if lower deficits cause lower interest rates, then someone needs to explain why we now have record low interest rates at exactly the same time we have record high deficits. And why is it that in the 1980s the deficit steadily rose and nominal interest rates steadily fell? Paradoxically, recent evidence ...

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