Interest rates may rise, but that will likely reflect faster nominal GDP growth and higher tax revenue, as well. The key metric here is the difference between government interest cost (the yield on government debt) and the growth rate of nominal GDP.  (It was the collapse in growth rather than the level of interest rates, per so, that created the Italy's debt crisis.) That gap is very high with Greece, for instance, but actually negative for the US. I would get the debt-GDP ratio on a downward trajectory toward typical post-WWII levels over the next two decades. But no need to balance the budget in five years or ten years.  Too much -- though certainly not all -- of the policy conversation about debt and the Fed on the right is being driven by doomsday prepper gold bugs or folks trying to sell gold or gold funds an selling inflation conspiracy theories.

Mitt Romney is not going to end the Fed. And I don't think John Taylor wants to end the Fed. What we should hope for is monetary policy that is rule rather than discretion based. I don't see America returning to a pre-Fed world. Time is better spent reforming the Fed so that it generates certainty rather than uncertainty -- and a more stable macro environment

I will respond!

I agree, a Romney-Ryan victory is an existential threat to Obama vision of  a high-tax, Welfare Superstate. In 2008, Dems thought  the Obama win marked a generational shift to the left and progressive revival. A President Romney and Vice President Ryan just four years later -- kind of a mind melter for them

The pro-market aspects of NGDP targeting, via the Market Monetarist blog:

-- NGDP targeting is ”neutral” – hence unlike under for example inflation targeting NGDPLT do not distort relative prices – monetary policy “ignores” supply shocks.
--  Level targeting minimizes the amount of discretion and maximises the amount of accountability in the conduct of monetary policy. Central banks cannot get away with “forgetting” about past mistakes. Under NGDP level targeting there is no letting bygones-be-bygones.
-- A futures based NGDP targeting regime will effective remove all discretion in monetary policy.
-- NGDP targeting is likely to make the central bank “smaller” than under the present regime(s). As NGDP targeting is likely to mean that the markets will do a lot of the lifting in terms of implementing monetary policy the money base would likely need to be expanded much less in the event of a negative shock to money velocity than is the case under the present regimes in for example the US or the euro zone. Under NGDP targeting nobody would be calling for QE3 in the US at the moment – because it would not be necessary as the markets would have fixed the problem

As long as you are going to have a central bank, its actions need to be guided by something. I would prefer a rules based systems keyed off the markets rather that ad hoc discretion -- the current system. If you want to argue that the US should abandon its central bank, that is a different argument.

Are we technically is a recession? No. But the NBER doesn't use the definition of back to back quarters of negative GDP. I would say we are definitely in the red zone

I don't think he is going to propose much new, just rip Romney as  W 2.0

Well that is exactly what Tim Geithner said a while back, business is always complaining about taxes or regulations or whatever. 

By now you have probably seen Obama say the economic is "not doing fine." So let's recap: Private sector doing fine. Public sector not doing fine. Economy not doing fine.  Obamanomics 101: Public sector = economy

he already talks about it, Geithner, too, saying how their proposals embody the spirit of S-B. 

I decided to stick to economic policy instead of "bomb Iran" or "fire the entire cabinet" but I will tell you that the buzz around Option 1, while not deafening, is persistent and loud

To me, it's ideology vs. wanting four more years. Another bad round of econ reports and the panic will turn to desparation ...

I think the danger here is not only the debt but the interest expense. And as rates rise, rolling over all that debt become every more expensive

And as it just so happens, the CBO put out its update econ and budget forecast today, with one scenario so bad their forecasting model breaks down in 2035.

I actually blogged about that chart. To me, that shows slowing momentum that was never really very strong to begin with. 1Q is probably as good as it gets by a long stretch