I think he does mean interest rates, which are not currently at the zero bound, as the fed has raised them several times lately. I think he probably should have written "trapped too close to the zero bound" which would actually make more sense. For instance the last round of interest rate increase look like they caused the markets to get very sick. That puts pressure on the Fed not to do any more raises. However if the Fed does not raise rates and if some nasty down-turn happened at this point then would the fed accomplish much by dropping rates to zero? Another idea here being that if you muck around all the time with interest rates to solve problems the effectiveness of the medicine may wear off, particularly if this medicine has delayed people from making needed structural reform. By structural reform I mean rebuilding the middle class not cutting social security or crap like that. Let me put forward a very radical idea. I suspect we need to actually restrict the amount of debt that people can accumulate as it make the system as a whole incredibly brittle. Think of consumer debt like a sort of "tragedy of the commons" situation. An individuals debt load should be their own business but if just about everyone is loading up on debt then the overall economy could explode which is everyone's business. In addition if a creditor can resell bad debt to other unsuspecting buyers then they have an incentive to give toxic loans and credit cards to people as long as they aren't holding the large amount of toxic debt on their own books for very long.