The U.S., Europe and now Japan have been lowering the value of their currency, mostly in an attempt to reduce interest payments on their ballooning deficits.
But others, including Dominique Strauss-Kahn, the finance minister, are insisting that at least part of the bounty must be used to reduce the public debt, whose interest payments now gobble up nearly a fifth of total tax revenue, and to trim the public deficit (to a planned 2.3% next year) against some future rainy day.
So we've announced a very ambitious and started to move on a very aggressive set of programs to help bring down mortgage interest rates, to reduce mortgage payments, millions of Americans will benefit from those programs, and again, you're going to see tens of thousands of small businesses see more access to credit because of the result of these programs.
CNN: Treasury secretary defends, explains response to crisis
And since the new regulations force banks to use any payment over the minimum to reduce higher-interest debt, raising minimum payments gives them the flexibility to apply more of the payment to lower-interest debt.
This will relieve the chaebol of their crippling interest payments and help them to reduce their debt-equity ratios to a target of less than 200% (compared with 400-500% now) by the end of next year.
He said the numbers sound good, but he's concerned that Bank of America has the option of putting homeowners into interest-only loans in order to reduce their payments.
Essentially the goal in re-mortgaging an existing loan is to reduce the payment by getting a lower interest rate, stretching out the payments over a longer period of time, or both.
Never once during those episodes has the United States defaulted on interest payments on the national debt nor has it had to suspend or reduce Social Security payments, although the prospect of both calamities occurring is always used to scare the American public into supporting an unconditional increase in the debt limit fairly quickly after the debt ceiling is reached.
Paradoxically, the very effect of the austerity they oppose has been to reduce the Greek deficit to a point where - if Syriza's demand for a moratorium on interest payments were to happen - they could balance their books.
Some private equity firms have been accused in the past of taking a gamble with the companies they buy up, by loading them up with debt - something that allows them to reduce the amount of cash they need to invest themselves, and which allows them to deduct the interest payments from their tax bill.
It means your payments don't reduce the nominal value of the loan, and therefore the amount of interest you pay, until the end of December each year.
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