Fed cuts rates, but, sorry, the shock absorbers are shot

The plague has arrived! WE'RE ALL GONNA DIE!

Nevertheless, be of good cheer. It's a great time to buy a car! Thinking of remodeling the kitchen? Go for it! Splurge on those Twins season tickets and lose yourself in a cheering crowd of 40,000!

The Federal Reserve this week made the deepest emergency cut to the cost of borrowing in 12 years. Hallelujah! All our troubles are behind us! (I'd use more exclamation points to express my enthusiasm, but I think I just broke that key on my computer.)

What business won't cast aside doubts about buying new equipment, leasing more office space or hiring more workers in the face of a worldwide pandemic? After all, they'll soon save a half penny on every dollar they borrow. A resounding call to action. (You'll have to imagine the exclamation point.)

On second thought, maybe cutting interest rates won't do much of anything for the economy. But President Donald Trump will briefly be pleased. Then he'll demand more.

Market moods sometimes challenge logic. This is one of those times.

Wall Street economists and other professional worriers lately have clamored for interest rate cuts as an elixir. But with short-term interest rates falling to less than 1.5% last week — hitting all-time lows — loans already are close to "free."

But who, down the block or across the oceans, is eager to take on more debt?

Global sales of new corporate debt hit a record $2.44 trillion at last count. What business executive wants to pile up more debt to gamble on economic growth, rather than contraction, in the face of a pandemic?

Don't place your bets on the people running airlines, hotels, shopping malls, sports teams, convention centers and all manner of businesses where the prospect of drawing a crowd suddenly has become life-threatening.

How's the family balance sheet at the moment? In the world of finance, the technical description is, "tapped out." If you think Americans deserve a lot of credit, a lot of Americans would agree with you.

U.S. household debt has hit a record $14 trillion. That represents a lot of payments on houses, cars, Visa cards and college loans.

The Fed's move to push short-term interest rates to close to zero leaves little or no room for further steps. Unless, you imagine the central bankers handing out electric blankets and toaster ovens with every loan, as commercial bankers did in the 1970s.

The Fed is an economic shock absorber that's seen its day. And that day was in the past, not the present.

As economist Paul Krugman wrote this week, "I've been saying for a while that I didn't know when the economy would next face a serious bump in the road, but I did know that our shock absorbers were pretty much shot. Well, here comes the bump. Brace yourself."

The Dow Jones industrial average plunged after the Fed's happy announcement on Tuesday. Looks like central bankers won't be fitted for the capes of comic book heroes any time soon.