Zero interest rates and buying assets from the banks serves only to bail out Wall Street and create asset bubbles that benefit asset owners, but this doesn't get money to the broad mass of consumers. The misguided theory seems to be that if the banks are made healthy, they'll eventually start lending to the little people. But people don't need more debt. Too much debt is what got them here in the first place, and more debt will only make things worse. What people need is cash to pay down the debt. If Ben Bernanke really wanted to solve the problem, he'd stop giving money to the banks and follow through on his "helicopter drop" threat to get the money where it's needed, to the people. One mechanism would be a printing-financed tax refund: give everybody a refund of all the federal income taxes they've paid for the last three years. Cap the amount for the rich and give some to the non-taxpaying poor to get the money where it will help.
Well, obviously Zimbabwe Ben didn't listen to that advice last year, and he kept printing hundreds of billions to give to insolvent (and evil) banks.
But maybe it's not too late. How about printing up that $1 trillion I suggested and giving it back to the people as a tax refund for the last few years' taxes paid? If we could accomplish a 2-for-1 devaluation of the dollar, that would solve the problems of almost all underwater homeowners and almost all insolvent banks, as well as make the national debt much more manageable. To keep interest rates low, we'd have to regain credibility by going back on the gold standard, but we could do that at $4000, $5000, or even $10,000 an ounce.
It's been done before. The U.S. has a long history of going back and forth between fiat money and the gold standard. The past 40 years has been the longest stretch of a pure fiat currency, and it's not ending well. Let's put this sick puppy out of its misery.