Deflation comes from a state of inflation, the very thing you prescribe.

Private debt are paid by the borrowers themselves.
Government debt are borrowed by politicians but paid by taxpayers and it’s $10 Trillion to infinity. Not good.

The act of price fixing the interest rate itself is the error in your approach. It’s flawed from the start.

Because of the leveraged nature of our banking system,
The booms are created simply because there is no natural limitation to the business loan market , and the price mechanism (rates)
is being fixed by a market non participant. Central bankers are neither consumers nor producers and functions more like a counterfeiter.

A fixed low price for rates and duration can still fund loans for stock speculations, internet based start ups, home building and mortgages to excess. The stupid loans bankers make are enabled by central bank price fixing.

The interest rate is not some arbitrary number that someone can just call without distorting the nations production and employment picture.

The interest rate is the price signal that aligns production with consumption in the economy. And this price is formed by the supply and demand for savings. Savings reflects consumer time preference
with regards to their money (save now to spend later). So a high savings rate means ample supply of savings and a lower price for borrowing and vice versa.

Production with savings creates employment without additional taxes, government debt, unsustainable booms or price inflation.

As of June, the US balance sheet had appx. $10 Trillion in government debt, 20 Trillion in private debt, and $70 Trillion in Assets. It also showed appx. $50 Trillion in Net Worth, and $14 Trillion in Income.

Most Americans would be happy if their debt was less than two year’s income and 30% of their assets. They’d be even more thrilled to know that their assets and income inflate instead of deflate.

The risks are that other countries lose faith in the ability of the US economy to provide value for the dollars outstanding, or that the debt-free wealthy get frustrated with their cash holdings losing value.

Given US natural resources, culture of innovation, and attractiveness for tourism, automated production capacity for various goods and services, outstanding educational institutions, and relatively reliable legal and government institutions, the ability of the US to make good on its foreign obligations seems reasonable. We certainly don’t have a labor shortage.

The bigger question may be the willingness of the wealthy and innovators to play in this market if tax changes, government regulation, and legal protection for private property rights trend the wrong way. But most countries still have a problem with income inequality and therefore have governments with some pressure to assure adequate economic opportunities for the populations (lest they degenerate into violence, which tends to happen when large differences in living standards and economic opportunity exist).

I have decried the 18 straight Fed interest rate increases because they directly impacted profitability for asset-creating enterprise, and created this economic meltdown. We have to have more control over the power of the Fed to create financial and economic crisis- because when I look at the fundamentals of the US (and world) economy, I see the productive capacity to eliminate poverty, lengthen life expectance, and provide the ability for people to pursue a reasonable amount of economic security, all while prosperity expands to a larger part of the world. But we have to break through the shackles of false scarcity.

Cost/benefit analysis is an interesting concept. It actually recognizes the “cost” part in a given situation.

The current unbacked paper money system of the nation allowed the federal government to saddle the American taxpayer with $10 Trillion in debt. All the ideas I hear being promoted to “get us out” are ideas that got us in it, and get us deeper in the hole. You don’t need an MBA in anything to tell you that can’t be good.

A reasonable question to ask then is how does the nation produce and create jobs without adding to the $10 Trillion debt?

FDR’s fiscal policies failed because monetary policy failed. In fact, I believe fiscal policy (how we slice the pie) is much less important than monetary policy (how much pie we have). Google “1930s money supply” and you’ll arrive at graphs that clearly show GDP trailing money supply by about six months. Obvious now, not so much back then.

Trade protection, higher taxes on producers, and welfare are also economically destructive policies where Limbaugh seems to be on the right side. Wether nicer bridges and more solar energy are better investments than destroying terrorism as an ideology- that is the more interesting question, because the cost/benefit analysis is certainly easier for bridges and roads than it is for war.

Lets get rid of the bankers first, then talk about what should back the money. Once we have 100% reserve banking, much of the instability ruining our fiat money will be gone. Libertarians need to join forces with other, more collectively minded individuals who support the abolishment of fraction reserve banknig but don’t necessarily want a gold standard. Once this aim is achieved, then lets have the argument for or against gold. Gettnig a gold standard while still retaining fractional reserve rules would be the worst of all possible worlds and would serve only to enrich the financiers further at the expense of the rest of us.