Interest Rates v. Crime Rates

James Austin and Gregory Squires in The Crime Report examine the  “almost perfect” correlation (.77, with 1.00 being a perfect correlation) between the rise and fall of interest rates and crime rates in the US since 1953:

The authors link interest rates to economic stress on families and individuals, and link this to findings by criminologists Arnold Linsky and Murray Strauss that states with higher homicide and suicide rates had higher levels of social stress, as measured by such factors as business failures, personal bankruptcies, and unemployment claims.

If the analysis holds, current economic trends suggesting no long-term increases in interest rates would suggest that crime rates will continue to remain at historically low numbers. On the other hand, if interest rates in the U.S. are starting to rise, and if the national debt expands quickly under the new administration, the consequences of cutting taxes without an associated increase in economic growth could also result in higher crime rates.

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