INFLATION: GOOD OR BAD?….John Quiggin notes, along with Brad DeLong and Paul Krugman, that last quarter’s impressive economic growth is unlikely to continue unless employment grows. True enough. But he also has another concern:

A second problem is that it’s hard to see how an economy with all levers set to maximum stimulus (near-zero interest rates, large and permanent budget deficits, depreciating currency) can avoid inflation indefinitely.

I don’t get it. For the past two years I’ve been hearing nothing but caterwauling over the fact that the U.S. economy is dangerously close to deflation, which would be a disaster on a whole bunch of different levels. Persistent high inflation is unwelcome, of course, but in the near term wouldn’t some inflationary stimulus actually be a good thing?

In other economic news, Brad notes that consumer spending, which drove a lot of last quarter’s spectacular growth, was actually down .3% in September, which means that the third quarter was already showing signs of weakness before it even ended. Looks like holiday shopping is going to be even more important than usual this year.