Reply #7: banks are deleveraging as fast as they can.

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under pressure from all sides to clean up their balance sheets, they are barely making new loans while retiring old ones as best they can.

yes there will be inflation but that is the inevitable result of paying trillions without meaningfully increasing taxes. as far as inflation goes, it would have made little difference how the money were spent.

personally, i would have preferred a much wider distribution of the money (e.g., to the neediest) and to establish NEW banks with clean balance sheets, rather than to preserve ALL of these banks who screwed up. but then, i'm not president....