With interest rate rises, the people in the most debt suffer the most. With tax rises, the highest paid suffer the most, and the govt has extra revenue to help the ones struggling the most. This is never considered by any govt. Why not?
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Because slowing the economy isn’t the goal.
The goal is to reduce the money supply. That’s done by the central bank (fed reserve in US) selling its assets (the money itself was created when the central bank bought the assets, and the assets are what’s backing the money). Because their assets are debts, that causes the interest rate to raise, too.
Also, the most affected by the interest rate raise are the ones that need to take new debt (including renewing a debt that needed to be paid but is paid by taking a new one) or that have a variable debt. They are mostly companies, the government, and people with a variable mortgage. In other countries, people with regular mortgages may be affected because they often need to renew them every 5 years. So, most people with debt aren’t affected. Actually, rich people tend to be affected by the drop in values of their investments because companies are affected.
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