Over time, interest rates below the inflation rate allow governments to refinance, erode or liquidate their debt, making it easier to live within their budgets without having to resort to more unpalatable spending cuts or tax increases.

Sure, the New York Times nailed it. This is all about our government living within the budget so we can start to erode or even liquidate our debt.

Jim Willie has been right about this mess for over 10 years and he continues with his latest article:

"The Hippocratic Oath dictates never to do harm to the patient. The central bankers instead take the Hypocritical Oath that dictates to cripple the patient, to drain the blood, to preserve power by tightening the straps, to erode buying power from hard work, and to render life savings a weak shell, while whispering lies in the ears on blame for what went badly wrong, against the background din of endorsed war themes."

http://www.financialsense.com/contributors/jim-willie/no-cb-solutions-liquidity-vs-insolvency

How come nobody ever mentions all those nice Treasury bonds and notes that our children and grandchildren will be able to invest in?

"easier to live within their budgets without having to resort to more unpalatable spending cuts": Not that they DO live within their budgets, or have any spending cuts.

Capital gain (however taxed) should be offset by inflation before any tax is assessed. If the gain is less than inflation, the difference should be deductible from pre-tax income and such losses allowed to be carried over until fully offset.

But, no matter what, our government should stop manipulating interest rates at the expense of individual savers.

I notice that when they flak PR for the whole lightrail/streetcar bonding, they never mention how it's "for the children"....the debt, that is.

People do not generally understand that a bond is just like charging something on a credit card. Buy now, pay later.

I do not believe the whole "inflation is low" thing. It certainly is not for food, gas or utilities, or even housing, which insanity will last and plague many of our lifetimes.

I ache for my father. His (long, hard) working days saw a lot of double-digit inflation. Now his retirement sees some heavy stock wipe-outs and zero returns on everything else.

"government can borrow more money and continue to put our children and grandchildren into massive hock."

I'd restate that by saying they get to spend now and don't have to worry about paying it back, that's your kids problem.

The sad thing is, we're getting deeper in the hole, banks have more money, we can fund crap like a CC hotel and any damn thing PSU wants besides turning out smarter graduates.

Yet when it comes to potholes and crappy schools, no money now and, at this rate, certainly no money in the future.

This is not news. The question is, where is AARP? Their members are suffering, given that they were told to expect 5-6% CD rates in the 80's.

"Their members are suffering, given that they were told to expect 5-6% CD rates in the 80's."

They should really move their money to that fund PERS uses, you know the one that gurantees 8% return?

Ben's printing press and unlimited balance sheet are the instruments of an immense income transfer from retirees, who expected to live on the interest income generated by their lifetime savings, to the Federal Government, whose resulting pool of monetized debt can be spent and spread oh so much better by the bureaucracy than grandma and grandpa could have done for themselves. Right.

People who are financially savvy, like myself, have escaped this retirement income trap, but the 99 percent, who the government supposedly backs up, are screwed, now ending their years in supplication and dependency, which inflates AARP's status, power and financial strength. Tis a tangled web.

Social Security was not intended to be a retirement fund in the sense we now use the term.
It is a safety net, so that us old folks don't end up living in boxes or tents. Most working people end up with enough to survive, but not enough to live in a golf course community.
The golf part is their own hook, and every time someone talks about privatizing SS, I have to ask where they were in 2008. Social Security is as good as old age insurance is likely to get.