Zero Rates: Another Form of Wealth Redistribution

As Keynesian economists and Democrats continue to fret about the imagined lack of demand in the economy, describing our current situation as “secular stagnation,” many are calling for even more extraordinary monetary policies. We already have negative real interest rates at the short end of the yield curve, but some want to consider even negative nominal rates. However, such policies will not stimulate the economy, but are just a backdoor way to accomplish even more income redistribution.