The truth is, they pay more than they get. Low interest rates are beneficial to the majority because these low rates enable producers, as well as consumers, to increase production, consumption, and capital formation, causing the economy to grow. As a result, personal income and the standard of living increases. According to most govemments the only ways to control the deficit are to raise taxes or to cut govemment spending. However, considering that the deficit continues to grow simply because of the exorbitant amounts of compound interest added to the original debt, one of the most effective ways to reduce the deficit would be to reduce interest rates.
Government deficits are an economic fact of life.
Low interest rates reduce the government deficit in two ways. Second, and most important, is the government receives higher tax revenues, when the interest rate is low, because the citizens of the country are producing, consuming, and investing more because the economy is growing. Government expenditures are lower because the need for social programs decreases as the economy grows and creates jobs. In fact, at zero interest, the debt would not grow at all, and the large amounts of money spent in servicing the debt could be used to pay it off. The government could not continue to fund its debt under these conditions.