Like Matt Yglesias, I don't quite get Peter Orszag's opposition to further quantitative easing from the Fed. He'd like to see Congress pass further stimulus, but thinks that's less likely if the Fed eases monetary policy. Why? Because a stimulus package should only be passed if it has an accompanying medium-term deficit reduction package, "and that medium-term deficit reduction package is less likely to be enacted when interest rates on long-term government bonds are so low."
I don't really understand this. But who cares? As Orszag says, the Fed's anticipated QE2 package will probably have, at best, a modest effect. What the economy really needs is "more fiscal expansion (read: more stimulus) now." I helpfully added italics to that quote since that seemed to be his intent. And remember: Orszag was widely considered the moderate deficit hawk in the Obama administration. If he thinks Job 1 is additional stimulus, people really ought to be listening to him.