Our economy is increasingly policy-driven, at least in the near- and medium-terms. What Congress and the president do or don’t do, what incoming Federal Reserve Board chairman Janet Yellen does or doesn’t do, will be important determinants of our growth, inflation, and job creation rates. So here is an attempt to see through the mist of obfuscation that is a feature of political and policy-making discourse, and spy the contours of future policy.

Start with the fact that the monetary policy gurus at the Federal Reserve Board have made it no secret that they would very much like to dismount the tiger that is QE3 — asset purchases and money printing — without turning slow growth into no growth or a recession. The only question is when — sooner if some monetary policy committee members have their way, later if incoming chairman Janet Yellen prevails. Add a second fact: the belief by a majority of Fed policy makers that monetary policy works: (1) printing money keeps interest rates at or near zero, (2) zero interest rates in turn force investors to hunt for yield, which in turn (3) drives up asset prices (houses and shares), (4) creating a “wealth effect” that encourages spending by those fortunate enough to own homes and shares, (5) thereby promoting economic growth or at minimum preventing a recession.