Why Stimulus Won’t Stimulate

"Unprecedented deficits to fund stimulus and bailouts means flooding the market with Treasuries to raise funds. Flood the market with Treasuries and you get higher interest rates.* Higher interest rates means asset prices get hammered more than they already have been. Knock asset prices down any more and already tattered household and corporate balance sheets will simply get obliterated.

In other words, massive “stimulus”—or more precisely massive government borrowing—could be the very thing that turns this deep recession into a nasty depression."