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Chas has it right--but reveals the issue: When do we know there is "an 
excessive amount of money circulating in the economy"? The issue is not 
theoretical--we can always construct a model that generates the outcome we 
want to generate--but empirical. He also reveals a critical insight into 
the importance of monetization--namely the importance of liquidity to 
commercial health. He notes the need for "balance."  Ah, yes. But again 
that is not a theoretical question, but an empirical one. 
 
My original question arose from the apparent inflexibility of some 
theoretical prescriptions being floated in the discussion. They don't help 
in practice; theory can and should inform policy choices, that is, framing 
policy, but within the frame there is still a lot of latitude.   
 
Fred Carstensen 
 
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