Inflation is the result of money supply growth. Money supply is determined by both the quantity of money, and its velocity, or how quickly it moves through the economy.
When the lockdowns began, the velocity of money plummeted. This means the biggest immediate threat is deflation.
But what happens when you try to ‘stimulate’ an economy while you are actively taking steps to STOP it? It makes no sense. If the stimulus incentivizes people to run out and buy things they otherwise wouldn’t buy right now, it’s working at cross-purposes to what we are trying to achieve. ‘Stimulus’ at this time is a stupid notion. What the various government bills should be are ‘immediate relief’ relief bills - not to stimulate the economy, but to make sure businesses don’t collapse, that people can make the rent for the next month or two, that people don’t run out of money for food, medication, etc.
I doubt any of this will ‘stimulate’ the economy. But it shouldn’t. We have no idea what will happen after the threat is gone. Maybe the economy will stay depressed and we’ll need a stimulus THEN to wake people up and get them out and spending. But maybe we’ll get the response we got after WWII and we will see a huge surge of spending and investment as we make up for lost time in the productive economy. Supply chains need to be rebuilt, stockpiles and warehouses replenished, stalled projects accelerated, etc.
The nightmare scenario is that we pump huge amounts of liquidity into the monetary system, which does nothing because velocity is low. Then the economy overheats during the reconstruction phase, driving up global inflation. And because governments borrowed themselves to the gills previously, we will no longer have the ability to use interest rates to fight it off. The result could be anything from stagflation to hyperinflation. Nobody knows. Or maybe velocity will stay low, interest rates will stay low, and the economy will just muddle along. But if the global economy roars back hard, inflation could then be in the cards.
BTW, that $2 trillion dollars, at 3% interest, is now going to cost you $60 billion per year in debt payments, pretty much forever since the U.S. has no prospects for paying it back any time in the forsee-able future. This stuff isn’t free. The debt next year will be around $25-26 trillion dollars. That means for every point in interest that the debt is subject to, debt servicing costs go up by $250 billion dollars. It wouldn’t happen instantly, but every time portions of the debt need to be rolled over at new interest rates debt servicing costs will go up. And lots of U.S. debt is in short-term instruments.
The U.S. government (among many others) absolutely needs low interest rates to be maintained indefinitely, regardless of whether the rest of the economy would be better off with higher rates. It’s a bad situation. If interest rates went to 10% to fight off inflation, there would soon be sovereign bankruptcies around the world. Along with corporate and personal bankruptcies since the low interest rates of the past 10 years have encouraged everyone to borrow and spend like drunken sailors.