Stphen Williamson makes a good point

The Treasury is not expanding spending in response to QE2, rather it is hoarding cash. Andy Harless says:

Actually, this makes perfect sense. (See my comment on Steve Williamson's blog.) T-bills pay 13 basis points, and reserves pay 25. T-bills are a cheaper way for the government to borrow and a better stimulus than bank reserves. If the Treasury borrows money and deposits it at the Fed, it's replacing relatively expensive government debt (bank reserves) with relative cheap government debt (T-bills). It's just as if the Fed had cut the interest rate it pays on reserves.

So the Treasury is basically adjusting is debt to better match the economy.

Then this Fed study is posted around which says that ZLB is restricting the effects of QE. So, my question is what is Janet Yellen talking about here:

Yellen Says Fed's Asset Purchases to Create 3 Million Private Jobs by 2012

The messages are screwed up.

I repeat the straight scoop as I see it. Government has been involved in bailouts in the face of technology shocks since 1980. We cannot afford the next bailout and technology is not waiting for government, it is restructuring time.