John Hempton, over at Bronte Capital is on my blog rool and I usually like his commentary. This time however he has gone over the deep end with an entry titled "why the federal reserve should literally throw money out of helicopters".
The gist of it is simple and I have covered it here many times, the money supply and velocity is shrinking by deleveraging and hoarding of the private sector, so the public sector is trying to re-inflate some with QE/printing presses and some argue that "it ain't enough" so the outlook is still deflationary. The only way out of the liquidity trap, where people hoard cash in deflationary expectations is to create inflationary expectations by ... yes, litterally throwing cash out of helicopters.
I find the post frankly hilarious. Of course the same effect is achieved with tax cuts but they would cost more than 2B.