He claims that there is not much that the Fed can do to contribute to the recovery. I would like for Mark or for Paul Krugman to write an essay on the topic of what would happen if tomorrow the Fed stopped paying interest on reserves. I think I can guess what Scott Sumner might write..

My own view is that we would soon find out what the limits are of demand expansion policies. I think that the economy would have a lot of Recalculating to do, but it would have more than enough demand stimulus.