Many economists, analysts, financial advisors and consultancies are providing existing and new means to solve the US debt issue. One more left field approach is to target GDP. Undertaking this explicit way to raise inflation help raise nominal GDP to 4-5% from the paltry 1.0 at the second quarter of 2011. To do this the Federal Reserve would have to take Quantitative Easing to another new found level - that is, printing an abundance of more money. Recent posts on this site, believe QE3 would not work. That is, because consumers never saw much of the QE1 and QE2 attempts to kick-start demand and growth.
As it stands, the US nominal GDP is plateauing. If it falls, then the US have a big problem, and debt will cause far more grief. Whilst right now there is no major Fed movement to have such a mindset change to their policy. Ben Bernanke's recent speech indicated that there is many more places to move should things continue to burn out...quite possibly this new approach could be on the agenda in months to come. At the end of the day the US Fed needs to look at all avenues, but one thing is for certain - money needs to be channelled through to those that will do the spending.
Surely the struggling USD will have a positive impact on US exports, potentially providing stability and job creation.
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