Comment of the Day: Fed?!?!: "There is a third possibility...:
...The only way to get out of the trap is to raise rates now and offset the contraction through simultaneous fiscal expansion: either through:
- traditional infrastructure (I'm not a fan),
- Helicopter drops (I'm more of a fan), or
- Fed purchases of stocks.
I think that Miles Kimball's negative interest rates would also work--which would be not a fiscal but a monetary expansion in Roger's taxonomy...