A very sad thing about all of this is that being in a liquidity trap provides opportunities. The government can borrow lots of money for almost nothing and build SUPERTRAINS. Alternatively, the central bank could just give the government free money and the government wouldn't have to borrow at all. Or, of course, Ben could just shower cash on all of us.
Normally these would be bad things because of the risk of inflation. We worry way too much about inflation, and this crisis has demonstrated that the central bank should normally target a higher level of inflation than it has, but that's not to say it's of no concern. Here we truly have an opportunity for some tasty free lunches and we're just leaving them on the table.
mmm...lunch...
