Comment: That would be totally insane

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That would be totally insane

if they did something intelligent like that.

Interest rates would rise to normal rates, though, and the Feds would have to spend around $750BN extra on the existing debt.

To balance the budget AND kill QE, we'd need to cut the existing trillion dollar deficit AND cut another $750BN, essentially removing the cost of Social Security and Medicare combined.

Deflation, I think, is blown out of proportion as a threat to prosperity. People imagine a deflationary spiral where everyone stops eating, driving and investing, but even if the price of everything was going to drop 5% per year forever, I'm still going to buy almost everything that I currently buy.

Author of Shades of Thomas Paine, a common sense blog with a Libertarian slant.

http://shadesofthomaspaine.blogexec.com

Also author of Stick it to the Man!

http://www.amazon.com/Stick-Man-Richard-Moyer/dp/1484036417