Seigniorage in central banking

Here Brad Delong is discussing the Ferguson paper, and he implies that in a static, no growth economy with 2% a year in inflation, the Congress can borrow at the inflation rate and get even money. The 1.3% is the money we pay, as a percent of GDP, to get fiat from the central banker.  Inflation is 2%, so no problem, according to Brad.

Moreover, 1.3% is the wrong number to look at. We want to adjust for inflation at 2%/year, and that gets us to 1.3% - 2% x 80% = -0.3% of GDP. We want our concept of budget balance to be not a stable real value, but a constant debt-to-GDP ratio. Making that adjustment tells us that right now the U.S. could run a primary deficit of 0.3% + 2.5% x 80% = 2.3% of GDP without seeing any increase in the debt-to-GDP ratio.

This really is the seigniorage model. Congress owns the fiat banker and has free access to the seigniorage account, buy how big is that account? The seigniorage account grows at the rate of inflation, inflation is the fiat banker spending its money earned by making money useful. But anyway, the number Brad wants is interest payment as a percent of the budget, because, in fact, the GDP thing does not own G. Federal interest to expenses number will triple to above 30%, and Congress will be unable to keep up.