Many of my anti-capitalist colleagues say that government spending is not crowding out private investment because interest rates are low. Therefore, there is plenty of money to finance private investment.

Unfortunately, in an attempt to protect depositors, and the government guarantee of such deposits, the bank regulators have increased the credit underwriting requirements on banks. Consequently, they are not lending to small and medium-sized businesses.

Interest rates are low because the Fed is printing money and as a result significantly increasing the money supply, thereby making money less expensive. The irony of artificially low interest rates is that it reduces the income of pensioners and savers. This in effect shifts money and consumption from savers and transfers it to the government, which is borrowing at artificially low rates.