When the Federal Reserve started paying banks to borrow money after 9/11 the borrowers took that money and built factories in China. This means the money was used to create jobs in China not in the US. The follow-on was a loss of income and the necessity of (1) lowering consumpution - defeating the purpose of monetary expansion - or (2) borrowing to consume.
The Fed instituted a negative interest rate following 9/11 and maintained it for (around) 2 years. Source: Economist
...built factories in China. This means the money was used to create jobs in China not in the US...
Apparently you don't read the financial press. See many articles in the FT, WSJ, and Economist. And, in case you don't know, there is this obscure thing called "Supply and Demand". And - guess what! - if you buy a bunch of stuff from someone they (1) have to make it and (2) they have to hire people to make it and (3) they have to have a place to make it.
...The follow-on was a loss of income and the necessity of (1) lowering consumpution - defeating the purpose of monetary expansion - or (2) borrowing to consume.
Hot News Flash: the US consumer has been borrowing on their equity to fund current consumption.
