Our impulse response

We do double entry counting, we at least attempt Euler smooth. So this is an impulse response.

What do we expect next? Another impulse. We cannot get any closer to equilibrium, we have settled, the sphere is packed.

OK, maybe a ten year sequester, we can drive the bus around a point of Euler growth/yr.  But, history tells us we be getting another impulse.

I am not complaining, what I know now, I give Nixon credit, and it is smooth as they could do.  I want to do it again, even milder, not an impulse, but a trend  Wiener process. Let us bet the 8 trillion default over a fifteen year period, then evaluate.  The curve above will rise much more slowly, and only unexpectedly, at the discretion of the Fed.  Then decay much more slowly. Impulse response approaches white noise as the Fed makes rounder tree trunk. We bet better hologram.

The plot is not to make the optimum S/L emitter, but to make the one we got half way better, we are still stuck with tax dollar central banking, and the sandbox can at least improve. It is about getting risk adjusted, representative sample of tax dollar users onto Fed accounts. To the extent that the Fed becomes efficient, Congress gets a return favor on the contract, a bit of default. Fair deal, the Fed need not hedge the government cycle, it has direct access to large government accounts. But government goes on cash flow accounting.