this post was submitted on 06 Apr 2025
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There's a problem that occurs when a lot of economic sanctions have been placed against a country - that country's economy becomes so disconnected from everything else that whatever is left of it is basically independent from international influence. There are no economic or political levers left to pull that will have any impact on that country, so it's difficult to do anything to change their behavior short of direct military action.
We have a similar problem when the federal interest rate is at or near 0% - there is no more adjustment room in the economic system, so the overall behavior can't be adjusted effectively. There has to be some wiggle room if you want to influence the system's behavior. Once the brake pedal is on the floor it can't go any further down.