Let me state, as a disclaimer, that I am a fan of Steve Keen although I've not read any of his recent works. That said, I have to take exception to the concept of an "ideal" interest rate that benefits borrowers above zero.

The fault in this thinking lies in how modern governments spend in the private sector and the misconception that they "borrow" the money to do so above what can be realized above taxation. This posits the payment of taxes and purchasing bonds as "funding mechanisms" for government spending. A fiat currency, for the issuer, is self-funding when created and neither tax payments nor lending can occur until the currency is created by the issuing government.

This places the supply/demand equation for currency into the reverse of most common thinking. When one realizes that the act of spending places a large supply of currency needing to find a productive investment into the market it becomes obvious that any action by the Fed to establish a rate above the natural rate of zero is a gift to investors.

The process of selling bonds is a currency drain for the banking system, not a funding mechanism for the government. Its utility as propaganda and a source of misinformation far exceed any benefit derived from it by the people. Not many investment vehicles provide a guaranteed ROI "and" the money to purchase them.

The people's government should not fund their enemies when it spends on the public purpose. The only way to avoid this is to end the issuance of bonds to match deficit spending and pay a small dividend on excess reserves in the system instead.