The econpundits are telling us Ben Bernanke has "gone nuclear" in his efforts to stave off a mini-depression. Economist Mike Feroli puts the Fed's actions in this context:
At last year's December meeting rates were cut to 4.25% and no bias of risks was given by the committee. In the twelve months since then, the Fed has travelled the distance that the BoJ covered in over a decade -- getting to zero interest rates and more explicitly engaging in quantitative easing.
So we are moving way faster than Japan did in the 1990s when dealing with a banking/real estate crisis. Fine. But will Obama go all in? Will Obama go nuclear? Yes, he will be pushing for a $1 trillion stimulus package. But the infrastructure path didn't work for Japan, and Obama economist Peter Orszag has in the past been skeptical of such a stimulus plan.
Two big questions: 1) Will Obama push for a taxpayer-financed homeowner bailout via lower mortgages rates, especially if the Fed's actions can't push them deep into 4 percent territory?; and 2) Will Obama push for expanded tax cuts? I think "yes" to the first, "no" to the second.