Fed's Kocherlakota: Inflation no worry, but we need get the debt and deficit under control or else...

Minnesota Fed's Narayana Kocherlakota says that the US is in no danger of runaway inflation.  What he is more concerned about is the deficit and debt.  The obvious response would be to raise taxes and decrease spending, which she regurgitated, but given the increase in spending under Bush and especially Obama, there is no way to get out of this through increased taxation alone. 

We must look at entitlements.  Via WSJ:
"We're certainly not worried about inflationary pressures building up right now," he added.

Still, the U.S. must address the deficit through some combination of lower spending and higher taxes, Kocherlakota said.

He said he favors creating a larger tax base with lower rates. That will promote "more economic efficiency for the same amount of taxes collected."

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