What Happened?

The US government and Federal Reserve has pumped about $4.7 trillion into the economy to get it moving again.  That’s about one third of the total annual gross domestic product, or what the entire nation produces in a year.  If you don’t think it seems to have done as much as it should have, you’re far from alone. Why this traditional stimulus has failed to kick-start the economy has been at the heart of many policy debates over this summer as we contemplate what comes next.  The central problem, however, is that we have been treating the situation as just another recession and not something very different– despite obvious signs.