I think Rob and I can both agree that it is extremely difficult, if not impossible, to measure the effects of stimulus spending so far. Rob writes, "I know this claim is not able to be substantiated, but given what we know about liquidity traps I think there is a good chance that using fiscal tools to compliment the Fed funds rate actually prevented substantial illiquidity and damage to GDP." Rob may be right, but again, we don't know. My concern is the combination of zero level interest rates, massive quantitative easing, and unheard of deficit spending. I hesitate to invoke the term hyperinflation, but does this not strike you as the perfect storm?
Rob, what's your take on what is more dangerous: inflation or deflation? Or, more likely, is it more complicated than that?
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