"The US economy just need a high dose of inflation", say Keynesian economists

As crazy and foolish as it may sounds, most economists who are listened to just want the Fed to print the way out of the Greater Depression. And of course, all these economists are Keynesian fools. Unfortunately, they are in prestigious organisations, such as the Federal Reserve, the IMF, Harvard business school, etc. Of course, inflation is not going to resolve the problem. The only benefit the US can make by inflating, is that they are stealing from all the other countries who hold US dollars. That's really the one and single thing that can "help" them. Otherwise, printing/debasing doesn't change the deal. It's just a transfer of wealth from one location to another. It's as if Ferrari said something like "Oh, our car cannot meet the 280km/h, so let's just change the definition of the meter and debase it by 20%". Makes sense? Obviously not, the car won't be faster, it's still going to go at the same speed...

On top of that, these brilliant economists want the people to borrow more and spend more. Unfortunately, they seem to be missing an important point: the crisis started because that same people borrowed up to their eye balls and had a negative rate of saving (which means that instead of saving more, they actually spent the savings they had!) up to the point where they were not able to pay back their debt anymore...

(Bloomberg) -- What the U.S. economy may need is a dose of good old-fashioned inflation. So say economists including Gregory Mankiw, former White House adviser, and Kenneth Rogoff, who was chief economist at the International Monetary Fund. They argue that a looser rein on inflation would make it easier for debt-strapped consumers and governments to meet their obligations. It might also help the economy by encouraging Americans to spend now rather than later when prices go up.

“I’m advocating 6 percent inflation for at least a couple of years,” says Rogoff, 56, who’s now a professor at Harvard University. “It would ameliorate the debt bomb and help us work through the deleveraging process.”

For the moment, the Fed’s focus is on preventing deflation [...]

“We are currently being very aggressive because we are trying to avoid” deflation, Fed Chairman Ben S. Bernanke told an Atlanta Fed conference on May 11.

Even after all the Fed has done to stimulate the economy, some economists argue that it needs to do more and deliberately aim for much faster inflation that would also lift wages.
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Given the Fed’s inability to cut rates further, Mankiw says the central bank should pledge to produce “significant” inflation. That would put the real, inflation-adjusted interest rate -- the cost of borrowing minus the rate of inflation -- deep into negative territory, even though the nominal rate would still be zero.

If Americans were convinced of the Fed’s commitment, they’d buy and borrow more now, he says.

Mankiw, currently a Harvard professor, declines to put a number on what inflation rate the Fed should shoot for, saying that the central bank has computer models that would be useful for determining that.
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Faster inflation might be preferable to increased unemployment, or to further budget stimulus packages that push up the national debt, says Mankiw, who was chairman of the Council of Economic Advisors under President George W. Bush.
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Some investors are already worried that Bernanke will go too far. “We’re on the path of longer-term, higher inflation,” says Axel Merk, president of Merk Investments LLC in Palo Alto, California. “It’s good for debtors but it’s bad for creditors. It’s dangerous and irresponsible.”