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5% of US GDP (which is around $15 trillion) would be $750 billion. 10% would be 1.5 trillion. Through all of QE a total of several trillion was spent on treas

5% of US GDP (which is around $15 trillion) would be $750 billion. 10% would be 1.5 trillion. Through all of QE a total of several trillion was spent on treasury bonds, bank bonds, mortgage backed securities, etc. https://en.wikipedia.org/wiki/Quantitative_easing#US_QE1.2C_QE2.2C_and_QE3 https://en.wikipedia.org/wiki/Quantitative_easing#US_QE1.2C_... By your own numbers, that should have been enough, and yet you've complained it wasn't. What gives?

dageshi 11y ago
QE isn't the same as what I'm talking about. QE isn't spent by the government it's money printed by the FED which is then used to buy existing assets from the market, typically US treasury bonds but others as well. The purpose of QE is to push more money into the banks in the hopes that they will go out and lend some of it, but that's not much use if people aren't confident enough to borrow. So you can't finance a tax cut with QE, you can't finance an infrastructure program with QE, you can't do any of the real "Keynesian" things that would make a difference because the Central Bank should never be printing money to finance government spending. QE is complimentary to but not a replacement for a Keynesian response.