QE is useless to increase the incentive to lend. Banks haven’t used reserves to lend since “34 when we left the gold standard domestically and simply create deposit accounts that the CB fills with temporary reserves to enable interbank transfers. The accounting balances to zero when the borrower’s contract is assigned a value equal to the principle of the loan.

This creates a condition where those reserves are obligations to the lending bank to be paid down with higher power money received from the borrower as s/he makes payments. Only Congress can create that high power money as it spends into the private sector, so the CB is dependent upon public money creation to “net” retire consumer debt. This can be masked with GDP growth as long as it is sufficient to roll over that consumer debt in a timely manner.

When GDP hiccups via the business cycle downturns the currency-issuing government must create enough currency to take up the slack or slight recessions become depressions as supply chains collapse like dominos. This is the purpose of the safety net and automatic stabilizers, not simply to provide for the unemployed.

The real utility of QE was to vacuum up risky assets from investment banks to provide stability. Because the CB and Treasury share a balance sheet those high-risk assets can be effectively canceled via payments to Treasury which are destroyed, as are all bond receipts, until they are recapitalized with new high power money creations upon maturity via “debt service” in the non-discretionary budget. QE was all about covert risk abatement, not “funding” anything. It was legalized money laundering and we will never know who’s risky assets were given this blessing.