by John Rubino
Dollar Collapse
To understand the impossible situation in which most retirees find themselves, let’s begin with interest rates.
When governments raise or lower the cost of credit, they’re communicating with the rest of us. Higher interest rates send the message that “cash is more valuable, so save more and spend less.” Lower rates say the opposite: “Cash is cheap so borrow and spend.”
Over the past few decades, governments have borrowed ever-greater amounts of money to fund promises ranging from global military empire to cradle-to-grave entitlements. To make these mounting debts manageable they’ve lowered interest rates to encourage individuals and businesses to borrow and spend, thus generating higher tax revenues.