ZERO -- does this make sense?

The US Fed's key interest rate range has been set at between zero (!) and a quarter percent.

In a single stroke, the Fed in effect eliminated the cost of borrowing money between banks overnight. It promised that US rates would stay at or near zero for the foreseeable future. At the same time new, unprecedented measures to stimulate the economy, pouring cash into almost every crevice of the financial system and massively expanding its own balance sheet.

The key interest rate is an interbank rate and not the same as prime but it will certainly impact consumer lending rates.

In effect the US government is saying to savers, don't bank your money because you'll get nothing for it -- spend the money you have.

The trouble is the economy got the way it is, in part, because there was a housing bubble. Low low mortgage rates and a vast inventory of homes for sale will encourage lending to people who can manage payments only so long as these remarkable circumstances prevail -- another bubble and more of the same.

Maybe in this country we should look for a short term stimulus package and a long term, sustainable, economic program.