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When there's downward pressure on growth, one choice is to adjust economic policy, increase deficits, relax monetary policy. That might have a short-term benefit, but may not be beneficial for the future.

I will say this: the central banks can actually support growth beyond a point. When there is no inflation, they can cut interest rates, and that is the way they support growth, but if you cut interest rate to the bone, there is nothing more to cut. It is very hard to support growth beyond that.

We need to keep in mind the well-established fact that the full effects of monetary policy are felt only after long lags. This means that policy makers cannot wait until they have achieved their objectives to begin adjusting policy.

If we don't get a grip on government spending, there will be no growth.

The Obama administration's attempted short-term fixes, even with unprecedented monetary easing by the Federal Reserve, produced average GDP growth of just 2.2% over the past three years, and the consensus outlook appears no better for the year ahead.

A lot of our fiscal deficit went to fund consumption and really did not get used to build investment and infrastructure. The trouble is, you can get a spurt in GDP growth, which may not be sustainable. I would much rather build the gradient of a long-term marathon.

Monetary policy causes booms and busts.

Monetary policy is like juggling six balls... it is not 'interest rate up, interest rate down.' There is the exchange rate, there are long term yields, there are short term yields, there is credit growth.

But clearly an economy that's growing and expanding like this one - and it certainly is doing that with high GDP output, employment numbers strong, capacity utilization strong - that's an environment in which the Fed needs to continually be alert to early signs of inflation.

The debt and the deficit is just getting out of control, and the administration is still pumping through billions upon trillions of new spending. That does not grow the economy.