Our free-market economy is just unstoppable:

The U.S. economy shook off headwinds from hurricanes Katrina and Rita to grow at a faster-than-expected 3.8 percent annual rate in the third quarter, a Commerce Department report showed Friday.

Strong spending by consumers and by the government helped power the expansion forward as growth in gross domestic product — the measure of all goods and services produced within U.S. borders — accelerated from the second quarter’s 3.3 percent rate.

Wall Street economists had forecast GDP would advance at a 3.6 percent rate in the July-to-September quarter. The economy has now expanded at rates exceeding 3 percent for 10 straight quarters.

Note that more precisely, “GDP” is the estimated total dollar value of all the goods and services produced by workers and derived from property (e.g., rent) — in this case estimated by the Commerce Department for all 50 states in the U.S.

Some are now arguing that all this good economic news will lead the Federal Reserve to raise interest rates in an attempt to curb inflation. The Fed raises rates when it wants to curb the nation’s money supply, making it harder for entrepreneurs to borrow money. As the Fed raises rates, banks that do the lending raise their rates. Higher borrowing costs make doing business a little harder. The Fed plays a balancing game by trying to keep growth from translating into a spiral of higher prices which, unchecked, could lead to a spike and then after-party crash.

It has already raised rates 11 times to 3.75% since the burst of the 1999-2000 economic bubble. Fed Chairman Greenspan panicked during the last boom and pushed up rates too fast, and left the stock and bond markets — and the rest of our economy — reeling. Let us hope that the new chairman, Ben Bernanke, will keep a cool head.

I’d rather take my chances with good economic growth. Better that people be employed than unemployed. High oil prices may temper the Fed — as higher energy prices act to reign in the economy just like interest rate hikes do.