Third, given government budgetary trends, some fiscal restraint is in order, and one might expect that those responsible for fiscal policy will move that policy to a more-balanced position (another development I would welcome), thereby removing some fiscal impetus.
I believe that the combined force of these three factors restraining aggregate demand, plus others that I have not mentioned, would require a lower real rate than otherwise to avoid economic slack. Let me add, however, that there is a powerful force tending to make the equilibrium real rate higher than it would otherwise be.