So it is starting to happen - the markets are starting to price in the devaluation of the dollar, or inflation, into the yield curve. In other words long-term bonds are requiring a much higher rate of return than short-term bonds, and the spread is now at a record.
I am not one to argue with a Harvard economist, but I disagree with Mr. Mankiw at the link above that this points to "future economic growth". This points to future inflation, and inflation is not "growth".
The downside of all of this is that the "stimulus package" is now backfiring, raising interest rates for mortgages, making housing more expensive, putting a throttle on the housing recovery (along with the throttles of higher taxes and lower deductions for the "rich").
In the mean time the dollar is plummeting. Because there are a lot more out there supporting a shrinking amount of wealth (at the end of the day they are just paper).
This administration is ruining the economy, not helping it.