Quote Originally Posted by sabang
A large part of this problem though is that the Fed did a lousy job of controlling the money supply, running an artificially low interest rate policy and thus encouraging speculation, debt and an asset price bubble when they should have been doing just the opposite.
That's only because the Fed has been strategically mislead for years, but in routine terms it still does a better job to control the business cycle, and it did. It was just not aggressive enough for the long term, a strategic mistake, but the Fed did a few well done soft landing over the years, something you can't accomplish with Fiscal policies.

Quote Originally Posted by sabang
Fiscal stimulation packages, and fiscal policy in general, is not seen as part of the day to day armoury of economic policy, but nevertheless it has had an important part to play in times of crisis.
I agree it's needed, at least politically, unfortunately the results are not always as expected and studies in the past suggest that they contribute more to the problem than fixing it. But again doing nothing is not an option either.