...if you have X amount of something and you increase its supply by, say 0.1%, that should decrease its price (per each unit) by a very tiny amount, no? That is all the stimulous package did - increased the supply of treasuries by an infinitismal amount.
...any reduction in price doesn't make $800 billion new treasuries cost 0 through price reductions which is essentially the argument your making(although you may not realize you are). The price might drop causing total amount of capital directed to them to be less than if you modeled them statically. But there is still serious capital going into them.
No, I never said the cost was zero, just that it was less than 800 billion. Even if it were 800 billion, that amount is a) completely insignificantly small, and b) just fine, because the point is that in a deflation/depression, there is no shortage of capital. Capital is plentiful and uninvested in the inevitable downward spiral of a capitalist failure, and the job of the State is to take said capital out of the hands of the 'private investor' and invest it (spend it) Itself. The point is is the control of the capital, and the need to reform capitalism by partial nationalization of same, because private control of capital is unworkable.
The ideal action an economic downturn is to seize the capital of the rich and spend it on the day-to-day hand-to-mouth needs of their poor.