Deficit spending is not the same as QE. In fact they're orthogonal. Keynesian economists believe you should deficit spend during recessions and pay down the deficit during booms, but the latter part doesn't ever end up happening because raising taxes is politically toxic so the deficit gets inflated away via QE. The U.S. could just as easily have operated at a big deficit during the recession and paid it back during 2012-2018 without QE.
While true, the European Central Bank (ECB) did raise rates at one point. Krugman (a Keynesian) sad this was a bad idea at the time, and that it would cause the recover to stall. And it did.
Because the ECB is generally run by Germans and they have an (anti-)inflation fetish, and so at the first hit of it they 'panic.
Moral of the story: listen to the Keynesian. I've been reading Krugman since ~2008, and he's been pretty right on most of the major monetary/fiscal policy points.
That’s a half truth, if you want to sell lots of treasuries at low yield, which was the case, you have to QE. There is a clear benefit to low yield debt in deficit spending, and so far no real harm (>10 years later!)
I would argue an asset bubble is quite a real harm, especially to future generations that are getting into the market at the current inflated valuation levels. But to each their own.
Asset prices as they impact real people are reflected in CPI, which shows low inflation. The fact that cash flow instruments are higher priced (and that’s largely because of low interest rather than QE) is kind of orthogonal to most people’s lives.
