The question is, are we going to have another Volcker willing to raise the prime rate to 20% to counteract our useless legislative branch? Or is the idea of an independent central bank dead at this point?
I think the only way out is to reduce military spending, nationalize the health care system, and tax the hell outta the ultra wealthy. But I suspect that won’t happen at least based on the current oligarchy running the country.
It’s really unfortunate too, because we could be taking on debt to invest in citizens like making college free, improving teacher salaries, and general infrastructure but… we ain’t.
Plus it'd also massively increase USG deficits since all the debt that's added and rolled over would be financed at that elevated rate. At that point, cuts would amplify the above domino effect (cf. Kalecki Levy equation) reducing tax intake, but no cuts would mean unleashing a debt spiral.