The necessary policy actions involve aggressive macroeconomic stimulus. Fiscal policy should ideally focus on tax cuts and infrastructure spending. Central banks are already cutting interest rates left and right. Policy interest rates around the world are likely to head toward zero; the United States and Japan are already there. The United Kingdom and the euro zone will eventually decide to go most of the way.
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Certainly, a key part of the solution is to allow more banks to fail, ensuring that depositors are paid off in full, but not necessarily debt holders. But this route is going to be costly and painful.
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Fortunately, creating inflation is not rocket science. All central banks need to do is to keep printing money to buy up government debt. The main risk is that inflation could overshoot, landing at 20% or 30% instead of 5-6%. Indeed, fear of overshooting paralysed the Bank of Japan for a decade. But this problem is easily negotiated. With good communication policy, inflation expectations can be contained, and inflation can be brought down as quickly as necessary.
Geni go back go back your bottle! Plea please go back to your bootlegs bottle, stop make us printing money $1billon note! Geni running track is Zimbabwe. If I wear the Genie keeper, I beat her ass purple blue gold red, until she is surrender! Completely knock out flat, she can not move, few bons are broken. She will say, I wann go back to my tilt teal bottle I have had enough this crap. All your assholes get stuffed on flat line!
