Just heard inflation for last month was .8 percent. Month before was .7 percent. 1.5 percent for 2 months is a rate of 9% per year. Hopefully it won't continue at that rate but if anyone believes we are in a deflationary period, I would like to hear their logic. Maybe those that supported qe1, qe2 and advocated qe3 would like to respond. How do you stop inflation. Only way I know is to raise the interest rate. A 1% rise in the interest rate will cost an additional 150 billion dollars just to pay the interest on the current debt. That means the gov will have to raise 150 billion in revenue or cut spending 150 billion just to maintain the current rate of the growth in the deficit.
Come on Keynesians. What is the solution. More spending. Surely more of the same thing will get different results. No crying about the past or blaming someone in the past. WHAT IS THE SOLUTION??? We have to deal with the problem TODAY!!