The current economic outlook is unnerving as inflation is low and falling in the U.S. and Europe and cutting rates is no longer an option. Policymakers must recognize that, while the acute phase of the financial crisis may be over, the chronic trend toward deflation that has followed it is not.

Ben Bernanke should ignore Congress and start tightening up soon.

Deficit-reduction measures in the new Congress and pressure to scale back the second round of quantitative easing could stunt U.S. economic growth and further dampen the global recovery.

Instead of the Fed focusing on short-term goals, their focus should be on long-term inflation reduction, encouraging businesses to be more certain with their investments.

We need good economics over politics, now more than ever. That means sensible tax reform, a Fed focus on maintaining liquidity, and rationalization of the European monetary system.

Keeping the federal-funds rate low for a long time was in keeping with the Fed's dual objectives of maximum employment and price stability.

To start down the path of sustainable economic recovery, the economy needs shock therapy: preventing deflation, reforming the tax system, and moving away from regulation.