>> If you can find a way to specifically punish people who did wrong, then I’ll support it. Otherwise, interest rates are a blunt instrument that punish everybody
That’s an interesting point, and well taken.
It hangs on how you define “did wrong”. Do you mean “broke rules”? Or something else?
I think it’s valid for the “system” (which I loosely define as the “marketplace” plus “government influence”) to “punish” not only those who broke rules, but also those who speculated with poor judgment, who gamed the system for personal or corporate gain, and so forth. Do you agree?
I might also point out that I endorse your description of interest rates as a blunt instrument — and I note that it cuts both ways (apologies for the mixed metaphor).
Lowering interest rates to loosen up credit to aid (primarily) those who made the bed of nails they now don’t wish to sleep in, “punishes” many who behaved with fiscal responsibility. Is it any more fair to punish innocents with too-low rates, than to accept similar collateral damage from raising rates or leaving them high?
Well said. Savers keep getting screwed.