The NYT had a story back in September with the following headline:
Before considering the impact on government finances, we need to first figure out what is causing the low rates. Is it easy money or tight money? To do that we look at NGDP growth, which has been very low since mid-2008. This means the low rates are caused by tight money. Unfortunately for the US government, as well as the governments of most European countries, this slow NGDP growth policy actually hurts government finances by raising spending and reducing tax revenues. So although they pay less interest, the deficits get larger. In contrast, the debt to GDP ratio fell slightly in the 1960s and 1970s, despite high interest rates. Fast NGDP growth helps borrowers reduce their debt burden.
So if savers are hurt by tight money, and government borrowers are hurt by tight money, who’s helped? Almost nobody. There’s a deadweight loss when RGDP falls. It’s like filling a ship with 1000 brand new cars, and sinking it in the middle of the Atlantic. That’s what “deadweight loss” means. A few T-bond holders are helped, but they typically also hold other assets, which fall in value.
PS. I’m way behind in reading comments, but I’ll get to them.