This is from Professor Mark Perry's Carpe Diem blog, which is a daily must read. I would definitely make some qualifying observations about his graph, however. First, the reason that interest rates are so much lower now than they were in the early 1980s is because our Federal Reserve is fixing the price of money using traditional monetary policy (a zero Fed Funds rate) and atypical quantitative easing measures (like buying mortgage backed securities). There will certainly be consequences to these measures in the future. Second, in the 1980s, household debt/income was about 60%, whereas now it is closer to 120%. So rates are lower, but the debt that households are carrying is twice as high. Third, we are facing a demographic time bomb with 80 million baby boomers wanting (at least in theory) to retire in the next 10 years. Finally, in the early 1980s, we had a President who favored free trade, free markets, lower taxes, less regulation and individual enterprise that leads to job creation. Currently, we have a big government statist who cannot wait to raise taxes, is provoking a trade war with China and who has never actually held a real job.

http://blog.american.com/?p=5380