Did the Banks Eat Our Cookies?

A liquidity trap sounds as if it should look something like the quicksand pit that a group of unwary travelers stumbles into while on safari. I haven't been prancing through any marshes recently, so when I read economist and Nobel laureate Paul Krugman chant, for the " 1.6 trillionth time, " that we're all stuck in one, I was a little confused. As it turns out, a liquidity trap doesn't look like much of anything. It's a scenario in which a central bank—like the Federal Reserve—is unable to stimulate the economy by easing access to currency. It's not good when this happens. After all, in addition to printing greenbacks, the Fed is responsible for monitoring and manipulating the economy more broadly. It was founded in the 1913 Federal Reserve Act "to promote effectively the goals of maximum employment, stable prices, and moderate long-term interest rates." In other words, its job is to make sure everyone in the country has a job and keeps earning, spending, and investing. Sounds like a tall ... (link)