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06/26/2012

Limericks Économiques: Unqualified Interest


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Limericks Économiques

As a primary task of the Fed, it
Should cheapen the cost of our credit,
Which would help a lot more
If the mean credit score
Would qualify many to get it.

The Wall Street Journal's Jon Hilsenrath reports that the Fed's efforts to spread the stimulant of low interest rates throughout the US economy is stymied by the many borrowers who are over-leveraged, underwater, and therefore unqualified to refinance at lower rates. Moreover, the fortunate few who can refinance at will tend to reinvest rather than spend the proceeds, as they were already able to buy whatever they wanted. In a response that is short on verbiage but long on sarcasm and contempt, the Zero Hedge blog suggests that our national economic model—borrowing to fund consumer-driven growth—may not be sustainable.

–Dr. Goose

The post was republished with permission from Limericks Économiques, which features humorous poems on the dismal science of economics.


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