To: i-node who wrote (669800 ) 8/28/2012 5:33:02 PM From: puborectalis Read Replies (1) | Respond to What's more, a Romney White House would make the Congressional GOP forget about cutting spending, and revert to their old ways under Bush (austerity is purely an out-of-power concept).Dylan Matthews at The Washington Post's Wonkblog looks at the three frontrunners to replace Ben Bernanke as Fed chair (Romney said last week that he won't renominate Bernanke).op-ed last year, he sympathized with Fed critics calling for the bank to allow its inflation target to double from 2 to 4 percent to spur growth, but argued that that policy was politically untenable. Instead, he proposed keeping the 2 percent target but making it a “level” target, meaning that if one goes under 2 percent inflation one year, the Fed will promote inflation of over 2 percent the next year. That would imply a considerably looser Fed policy regime than the one currently in place, one that could be achieved either through additional asset buys (that is, quantitative easing) or other, less traditional policies.In another piece, he cheekily suggested implementing a 10 percent negative interest rate on cash by invalidating all paper currency whose serial numbers have a certain final digit . The effect would be that 10 percent of all money would be wiped out, spurring people to spend it or keep it in banks that offer higher, but still negative, returns. In a follow-up post, he argued that a negative interest rate of about 1 percent is appropriate.As economist David Beckworth has argued , Mankiw has all-but endorsed the controversial notion of targeting nominal GDP, which goes under the category of "unusual unusual" Fed actions.businessinsider.com
