Once more, we witness the inevitable anti-democratic logic of austerity: to make decisions that are against the interest of the majority, experts have to have a free hand. These policy episodes only help underscore the structural anti-democratic nature of our economic system more generally.

One of the biggest myths surrounding our economic system is the independence of the Federal Reserve. It is a product of law, (as is the US dollar itself) and as such is responsive to Congress and the Executive. It uses complexity to hide its dependency so John Q Average doesn't blame his political representatives for his misfortunes, but it can never escape the macro reality it functions in.

There is, in economist circles, a lively debate ongoing about the effectiveness of austerity to curtail inflation, especially on the monetary side. Increased rates do, after all, provide greater return for the investment class (how many Treasury bonds do you own?) in the form of money newly created by Congress to service the debt that never has to traverse the economic ladder to reach the top.

However, as you mentioned, they also make everything requiring private sector debt more expensive and therefore less available to fund economic growth. But, isn't that the "definition" of inflation and the only question presented, who should benefit? Wouldn't the natural equilibrium point of wage/profit end up being higher if the profit side wasn't backstopped by money creation and Treasury issues?

Bonds don't "pay for" government and only facilitate ROI and the Fed's ability to manipulate rates in the first place. There is ample evidence to support the concept of a permanent zero base rate and the elimination of Treasury bonds. If bank reserves exceed the level considered safe then taxes are the best tool to reduce them, not temporarily reducing them only to later increase them further. Our low tax environment is more responsible for current inflation than our low-interest rates and blame should fall squarely on our politicians fawning over their donors for contributions.