Submitted 12 hours ago by brisk@aussie.zone to australia@aussie.zone
Guardian Economist Greg Jericho shows - with interactive graphs - how the RBA’s interest rate policies have missed the mark and depressed Australian living standards in an unprecedented way.
The problem is that the RBA increased interest rates to discourage individuals from borrowing more. The problem is that We had already borrowed so much that the increase was crippling.
They should have only increased rates on new loans and reduced rates on existing loans.
That’s an interesting concept but not one the RBA has any control over. You’d have to freeze old loans somehow too to prevent people redrawing and consolidating debt into old facilities? And get all the banks to adopt it? What about international debt? Don’t think would be doable in practice
In the US, the vast majority of mortgages have a fixed rate over decades.
90% of mortgages are fixed-rate for 30 years according to this page: mortgagecalculator.org/…/how-many-years-mortgage-…
I don’t know the details of how that works, but yeah, it’s possible for the vast majority of home borrowers to be on fixed rates.
incogtino@lemmy.zip 7 hours ago
Inflation hits the most vulnerable the hardest. Their incomes and savings are eroded directly by inflation
Those who already own houses or are mainly invested in stocks are able to weather inflation long term (while being affected short term by higher interest interest rates on debt)
If inflation is still high, and unemployment not rising, in who’s interest would we lower rates?
Is it such a bad thing for home borrowers (which is who we’re really talking about) to have less disposable income while preserving the purchasing power of those who at best would like to buy, or at worst are already living paycheck to paycheck on minimum wage?