The artificial money

The artificial money, prompting low interest rates, is not being utilized because people are still in the process of repairing their balance sheets. The artificial excesses are simply being circulated through loans from institution to institution to produce artificial gains that amount to more money with nothing to back it up.

At the same time the government is running trillion-dollar annual deficits

When the Fed must, in Chairman Ben Bernanke's words, begin "removing liquidity," by selling bonds, the external debt of the federal government will rise and the Treasury will then have to pay interest on that debt to the public. Selling a trillion dollars of Treasury bonds on the market—at the same time the government is running trillion-dollar annual deficits—will drive up interest rates, crowd out private-sector borrowers and impede the recovery. Debt-service costs to the Treasury will spiral as every 1% increase in federal borrowing costs add $100 billion to the annual budget deficit.