Since none of us are talented enough to be able to jump into a time machine and go back to late 2008 to study a world without QE 1 and 2, it’s difficult to analyze the what if of not pursuing the easy money policies of the last three years. Would unemployment be higher? Would there be more bank failures? Would there have been another Bear Stearns-esque firesale of a major investment house?
My guess is that unemployment would be about the same (a bit lower, perhaps, for scare purposes), as would consumer credit, manufacturing, retail sales, housing starts, etc etc…