In 2010, the U.S. economy has been showing signs of pulling out of its tailspin. But questions remain about why it took so much monetary policy firepower to deal with the crisis.

This essay argues that central bank independence is more important today than at any time in history. Because fiscal incentives for inflation grow as government debt grows, and in view of the huge run-up in government debt in the 1980s, with prospects for continued growth in the 1990s, we...