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The reason we have a perpetually weak economy

Economic life support is still necessary - despite equity and housing market records - because people's fears are making them reluctant to spend

The reason we have a perpetually weak economy
Photo: Roy Scott / Ikon Images / Getty Images

Ever since the “Great Recession” of 2007-2009, the world’s major central banks have kept short-term interest rates at near-zero levels. In the US, even after the Federal Reserve’s recent increases, short-term rates remain below 1%, and long-term interest rates on major government bonds are similarly low. Moreover, major central banks have supported markets at a record level by buying up huge amounts of debt and holding it.

Why is all this economic life support necessary, and why for so long?

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