The massive amounts of fiscal and monetary stimulus in 2008 and 2009 worked to prevent the ‘great recession’ from worsening into another great depression. But increasing amounts of stimulus have been needed since just to keep the economy’s head barely above water. QE1 was followed by QE2’s $30 billion of monthly stimulus, which was followed by QE3’s $40 billion, which was followed by ‘QE to infinity’ in December of last year, in which the stimulus was raised to $85 billion a month.
Dialing back stimulus on an economy that needs increasing amounts just to maintain the status quo will cause problems.
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