The only exception to this is Japan: R.I.P. It's been attempting to re-animate its economy with 0% interest rates for an entire generation. Yet, again, today it's looking for even more extreme forms of stimulus for its own corpse-economy.
There is a very good reason why governments have refused to engage in such recklessness before. This is the most extreme form of economic stimulus possible: "free money." In any remotely healthy economy it would cause that economy to radically overheat, and then quickly explode into sector after sector of asset bubbles.
Zero-percent interest rates are literally the economic equivalent of a defibrillator: the most extreme economic
, and thus only intended to be used on a "patient" (i.e. an economy) on the verge of death. The analogy here is as obvious as it is precise.
We have a doctor claiming to "treat" his patient by using a defibrillator. For the next four years, day after day, the doctor claims the patient is "recovering" (but yet never pronounces the patient healthy). However, throughout this entire four-year period the doctor has continuously been shocking the patient with his defibrillator.
When we witness a doctor shocking a patient with a defibrillator again and again and again, relentlessly and continuously for four years, are we witnessing a "medical recovery?" No, we are watching someone char a corpse.
There is one ultimate, conclusive action in which the U.S. government and the Federal Reserve could engage to show the U.S. economy is anything other than a charred corpse: normalize interest rates; even set the benchmark rate at the lower end of "normal," roughly 3%.
If the United States is a "recovering economy" with four years of GDP gains, and wage and jobs growth then surely Dr. Bernanke can (finally) disconnect the defibrillator?
Indeed, Fed Chairman Ben Bernanke began talking about his "exit strategy" (i.e. disconnecting the defibrillator) all the way back
Then something unprecedented in economic history took place. At the
end of 2012
, three years after Dr. Bernanke began promising his "exit strategy," the good doctor announced he would keep shocking the U.S. economy with his defibrillator until at least 2015.