As a reforming economist, I think it is fair to say that in the current environment, you could justify just about any economic program or government policy by manipulating the discount rate plugged into your economic model. That is the case whether you are debating the “social cost of carbon” in energy related investments or the “savings rate” in allocating stimulus funds across income groups. At a time of sustained historically low or zero interest rates, the absence of significant discounting of future cash flows is the “new math” of public policy. Even this AM, with the Feds about to drop $2 trillion in new cash from helicopters, the inflation rate is flat and gold prices relatively flat.
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