If the Fed raised US interest rates to 3% today, what do you think inflation and unemployment would be in 3 years? 6 years? 10 years?

The same as now.P

My thinking is it would cull the herd, and both growth and inflation would be faster. Culling the herd has immediate costs. But after 10 years of what we have now - where Bernanke worries about people forgetting how to work - those costs look smaller.

QuoteOriginally posted by: PaulThe same as now.in other words, quantitative easing isn't working

Let's take it a bit higher. Much higher. Let's say the interest rates are 15%. This means two things:1. Taking loans is now too expensive. You might say "there will be less loans". I think the opposite is true. Giving loans is now very profitable, and banks will want to give loans. But they'll be a lot more careful about it since they have limited liquidity. Good allocation of wealth.2. USA taking debt is too expensive. It doesn't take a long time for the gov. to figure this out. With 15% interest rate, they know that they MUST allocate their fortunes accordingly and get their accounting fixed. It won't take too long with 15% to hit the wall. Good allocation of wealth.At least, that's how I see it. High interest rates means profitable businesses that need to focus on quality and large margins instead of quantity and price their products to the bottom.

Here's one way to find out: http://projects.wsj.com/games/thefedera ... =inert-wsj

QuoteOriginally posted by: exotiqHere's one way to find out: http://projects.wsj.com/games/thefedera ... t-wsjScore 2 Stars: 5% average unemployment with 2.4% average inflation, what do you have to do to get 3 stars?..this is damn near impossible

Four ways to answer such questions