As I've noted before, one thing I've learned from this recession is that it's not as easy to increase the money supply as I thought.
This is Mark Thoma. But how about a big bond bonfire? (call it a bondfire if you must) How about direct financing of government debt?
I never got why Japan's lost decade was accompanied with such an explosion of government debt. The way I see it, below target inflation (let alone deflation) is a license to print money, and if the banks will do nothing with it, then the government should.
We seem to have forgotten the oldest trick in the book.