What Really Solves America’s Debt Woes—And Why Rate Caps Aren’t It

Free-marketers rightly criticize the Fed for manipulating interest rates, which serve as important price signals to entrepreneurs. Many stumble, however, in applying this same criticism to other forms of price controls, such as interest rate caps, which have been revived earlier this year.

The following article was originally published by the Mises Institute. The opinions expressed do not necessarily reflect those of Peter Schiff or SchiffGold.

Nothing brings Republicans and Democrats together like using simplistic, heavy-handed government regulations to attempt to solve complex problems. Unfortunately, the promise of easy solutions blinds policymakers to much more effective alternatives.

Recent proposals to cap credit card rates are a good example. In February, Republican Josh Hawley and socialist Bernie Sanders proposed a Senate bill that, if passed, would cap rates on credit cards at 10 percent. In March, Republican Anna Paulina Luna and Democrat Alexandria Ocasio-Cortez introduced a similar bill in the house that would establish the same rate maximum.