I have a better idea. Also a completely unfeasible one, since it requires congressional action. But still better. I'll keep the numbers the same for simplicity's sake.
The Treasury issues $600bn in new T-bills. The Fed creates $600bn out of thin air, and buys those T-bills. Suddenly the government has $600bn in new money to play with. $300bn goes to pay for infrastructure upgrades. Put people to work building roads, railways, bridges, fiber-optic broadband, and sewer systems. Take the other $300bn and drop it from a helicopter. Send every American a $1000 check. Even if they all use it to pay down the debt they're in, it will at least speed up that process. Some, hopefully, would go buy stuff. If people buy more stuff, businesses can hire more people, who can then buy more stuff, etc. Those construction workers who don't have new homes to build can get jobs building bridges, etc. They now have more money than unemployment was giving them, so they can pay down debt and buy stuff.
Just as importantly, the Fed will have just printed $600bn and injected it right into the heart of the real economy. This may cause inflation. Good! Inflation is at 1% right now, it should be higher. Higher inflation (~3-5%) will get people out of debt faster. It will make real interest rates drop below zero, making securities a bad idea, and pushing businesses to expand instead of sitting on cash.
And best of all, the Fed could just choose to immediately forgive the debt from those $600bn in T-bills. Since that money was created out of thin air, the US doesn't owe it to China, and it doesn't get added to the national debt. It may weaken our currency, relative to other world currencies. Good! That makes our exports more competitive abroad and makes American-built products more competitive with imported goods at home.
Obviously, this is a bit silly. But the economy is still pretty fucked, so it would be nice for policymakers to think outside the box a bit.
UPDATE: Yglesias writes something similar today:
As it happens, I don’t like that idea a huge amount at this point. I think what we should be looking to do is to give the money directly to households. Instead of creating money and using it to buy $600 billion in bonds, create money and use it to send $2,000 to each American. That’s an approach that would be superior from a humanitarian standpoint even if it didn’t ultimately produce macroeconomic gains, and it would also have more political legitimacy.
UPDATE 2: Karl Smith, sitting in for Ezra Klein, also wouldn't mind a helicopter drop:
A number of economists are concerned that the Federal Reserve can't on its own stimulate demand. I am skeptical here, but with unemployment holding steady at 10 percent I am more than willing to consider alternate strategies.
The most straightforward would be what economists nicknamed the Helicopter Drop. At its core this means that Federal Reserve would print money and the IRS would mail that money to people as checks. It would be as if we dropped money on the nation from helicopters.