Negative interest rates are mad though, you would expect house price increases and massive stock price increases so that dividend yields, rents and interest rates are in line (adjusted for risk). Yet you don't... My theory is that only really the government can issue debt efficiently, and we've have a recent turn towards austerity. In addition, the private sector is highly indebted (although obviously an economy as a whole can't be in debt as for every borrower there is a lender).
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"My theory is that only really the government can issue debt efficiently..." Ok, you've lost me here.
The government and central bankers are manipulating the money supply and interest rates. We need less of this, not more.
What I mean is that only the government can borrow at the risk-free rate. Out of interest why do we need less of this? I think as a whole (although it's obviously not perfect), central bank policy helped the financial crisis not turn into a 1930s prolonged depression. Remember in an economy, your spending is my income, and my income is your spending so if everyone tries to simultaneously save, everyone is worse off. This is a classic collective action problem - what is in everyone's private best interest isn't in the interest of the community. Having a government step in with fiscal policy solves this situation.