ADP reports 532,000 job losses in May. So that's over 2.5 million jobs lost this year alone, or roughly 4% of the U.S. workforce.
No amount of money printed could ever turn these people back into consumers unless that money went directly to them instead of via intermediaries such as banks. They need jobs. All that cranking up the printing presses even more than they're already cranked will do is make mattresses plumper and the Fed's electronic vaults creak under the weight of all those zeros, because in a time of deflationary expectations where people believe their money will be worth more in the future than it is now (because they expect their income to be lower in the future), they save, they don't spend. And that applies to banks too -- no matter how much money you pump into the banks today, they won't lend, they'll just stash it into the Federal Reserve's vaults, both because people aren't borrowing due to deflationary expectations, and because they see interest rates as being higher in the future than they are today so will wait until interest rates go up again before they start lending again.
In other words, printing money is a NECESSARY but not SUFFICIENT condition for economic recovery, just as a working financial system is necessary, but not sufficient. Capital is necessary in order to lubricate commerce, but capital is not enough. You have to pay people to produce things in the economy, things that require consumption, things that require the money to actually move in the economy rather than just plump up a mattress, because money that is plumping up a mattress is just mattress stuffing and worthless as a medium of exchange in the economy. Now, according to Auto Nation, 45% of the people who would have gotten auto loans last year can't get them this year. Which, it turns out, corresponds roughly to the drop in auto sales. How about a BigThreeMae like Fannie Mae except providing cheap guaranteed auto loans to qualifying buyers of Big Three autos? That would create jobs that rippled through the economy, as auto makers ramped up their production lines, suppliers hired and did the same, their upstream resource providers did the same, etc. How about printing massive amounts of money via selling Treasuries directly to the Federal Reserve, and using that for vast infrastructure projects to employ these millions of unemployed Americans either directly or indirectly via the supply chain for these infrastructure projects? Just handing money to banks has failed, they just stuff it under mattresses. Just handing money to ordinary Americans via tax cuts failed, they just stuffed it under mattresses. But if we get these funds flowing towards something that *creates jobs*, we might -- just might -- keep the entire world from sliding into a new Great Depression that would make the old one look like child's play.
-- Badtux the Economics Penguin