It might be worth sacrificing a permanent increase in inflation for a temporary cut in unemployment--if the increase in inflation were tiny, and if the drop in unemployment were big and prolonged (albeit not permanent).

ECONOMIST: Up the NAIRU without a paddle

Key to mitigating the damage of the about-to-worsen inflation is making permanent the tax cuts of 2003--or at least extending them for a couple of years.

FORBES: Mitigating Inflation's Fallout

In the 1970s, for example, blunders in monetary policy led to horrendous inflation, which people took to be permanent.

FORBES: Our Cover Story