This is just my opinion and is based solely on spending 3-4 hrs a day watching Bloomberg, reading the financial press and having just enough understanding of economics to be dangerous. This is how I see things playing out. Everyone is going to be caught flatfooted by the amount of growth engendered by a fairly small amount of stimulus. Right now velocity of money is still hovering around 1 and there are probably several trillion dollars of excess liquidity in the system. A lot of people are saying that this liquidity amounts to an effective monetizing of the new debt being created. Taken on it's own, that would probably be true. BUT, the economy is much leaner and hungrier animal that it was a year ago. Cost cutting has been merciless. Payrolls and inventories have been slashed as have advertising and cap-ex. Putting a dollar into this economy is going to be a different experience than putting a dollar into the economy of 12-18 months ago. It will utilized much more efficiently and therefore will produce proportionally more growth. Doing economics by analogy is always dangerous and usually sophistic, but to give the argument some color, it's like the difference between putting a gallon of gas in a land yacht and a crotch rocket. One will take you about 15 miles and the other will take you about 60 miles and at twice the speed. Efficiency is the key to growth - finding new ways to do same things better and faster or finding ways to do new things that eclipse older things - because the new things are better and/or faster. An increase in economic activity implies a greater need for money to suppport more and bigger transactions. Normally you would have to rely on the Fed to, in it's holy beneficence, increase the money supply to goose or support an economic expansion. But right now we already have probably some ridiculous multiple of the amount of liquidity that would be required in a normal expansion. So, as soon as the money from things like 'cash for clunkers' starts to work through the system, that money will produce more real economic value than in any previous economy. That will increase the demand for money which will immediately flow from excess reserves into productive lending. This will result in a fairly sudden increase in the velocity of money. Lather, rinse, repeat. And because you have a ready supply of liquidity, this will happen in record time. Sort of like having nitrous injection on your crotch rocket.