Well I wasn't even talking about growth vs steady-state. I was talking about monetary policy vs fiscal policy. A traditional Keynesian stimulus would have been fiscal in nature, and preferably direct state spending on productive matters.

Here's a few things that could have been done:

* Increased spending on scientific research

* Reform the health-insurance system to a universal system for greater efficiency while pouring extensive funding into it

* Vast amounts of infrastructure and public-works projects (especially: bridges, sewage infrastructure, electrical grid, fiber-optic internet, etc)

* Refunding/renationalizing state universities

Most of these sorts of things were utterly uncontroversial until the "neoliberal bloom" of the 2000s, in whose wake Western politicians have apparently forgotten how all their predecessors have managed recessions ever since the Great Depression.

And that's before we talk about undoing financialization and fixing the world's iniquitous trade policies! Those would be controversial!

LOL no all it means is the sales price goes up. Harry HowMuchAMonth can pay $2K/month on his mortgage, and that's exactly how much he WILL spend regardless of interest rates. All the interest rate controls is how big of a check the former owners will get.

Although your reaction mechanism is wrong, the end result is the same, although the former owners are likely to roll their immense check into their new real estate purchase, eventually, at the far end, as people move into nursing homes or whatever, they DO cash out and those guys spend the "gains".

One problem is I don't know if $5K/month nursing homes are considered discretionary consumer spending.

There are also people who cash out refinance, and spend it on jet skis and Harleys. That works great at long as real estate prices only go up, regardless of personal income declining.