Fed's "Stability" on Interest Rates

In response to:
http://angrybear.blogspot.com/2007/06/cursed-on-bear-stearns-hedge-fund.html

I don't claim to know what the Fed will do in the next couple of years, but someone recently explained to me why the Fed won't lower interest rates to soften the landing on this housing bubble. He said governments around the world are raising interest rates on their securities (national debts), w/ the UK for example at around 8% right now. To keep our own marketable against the competition, we have to keep offering rates at least as high as what we offer now. Considering that we have an $8+ trillion debt growing at about 1/2 trillion per year, we have to pay for it by raising taxes & selling debt.

Granted, the Fed may lower rates to rescue housing investors & borrowers, but that would mean less money from overseas to fund national debt. More funding would have to come from raising taxes. So we're between a rock & a hard place. And that doesn't even account for Social Security: the oldest boomers turn 62 next year. Through abortion & birth control, they reduced the very taxpayer base from whom they can collect. It won't be long before I'm fully funding the Social Security account of one baby boomer (plus the cut the gov't takes for processing everything). When my generation hits that taxation level after years of 0% savings, what happens?