Christina and David Romer are both Keynesian economists with impeccable credentials. Thus I thought you might be interested in their views on monetary offset:
Massive demand-side stimulus in an economy closing in on its productive capacity would have one of two effects. First—and most likely—it would lead the Federal Reserve to raise interest rates, offsetting as well as it could the expansionary effects of the stimulus. Output would rise little, and the main effects would be on interest rates and on the composition of output between the components stimulated by the fiscal expansion and the components restrained by higher interest rates. Second, if the Federal Reserve did not respond, the result would be inflation. And if the stimulus were large enough to try to push the economy 10%, 20%, or more above its productive capacity, the inflation would be substantial.
This is from a report criticizing the Sanders economic plan, which suggested that the US growth rate could be raised to 5.3%/year. Since October 2009, growth has averaged a bit over 2%, as unemployment has fallen from 10% to 4.9%. Even progressives like Matt Yglesias admit that Sanders proposals would reduce the labor force participation for many groups:
Friedman assumes there will be no growth-slowing supply-side impacts of any of Sanders’s policies initiatives. You don’t need to be hostile to Sanders’s goals or policies to see that this isn’t the case. For example, if you make Social Security more generous while also giving people free health care and raising taxes, some people are going to retire earlier. This is a feature of Sanders’ agenda (early retirement is nice), not a bug. But by reducing the number of people in the labor force, it will slow the rate of GDP growth.
Sanders’s plan to make college free has the same feature. Reducing the price will increase the number of young people who go to school and decrease the amount of part-time work that college students do.
As an aside, Yglesias is still a bit too soft on Sanders, and way too soft on Trump.
And Sanders also has some interesting views on monetary policy:
Mr Sanders has bold plans for monetary policy and banking, too. He supports a movement headed by Rand Paul, an erstwhile Republican runner, to get politicians more involved in decisions on interest rates, because he thinks Fed policy is too tight. To loosen it, he would bar the Fed from raising rates when unemployment is above 4%.
In other words, hyperinflation!! Have I changed my mind that Trump is even worse? No, but this should help you to better understand just how much I despise Trump.