Another way to look at the inflation/deflation angle is to consider not just borrowing and currency, but to look at the wealth held by all americans. For 2007 it was estimated to be around 57 trillion dollars, much of it held in investments and real estate.
If you were to consider half of that value lost, you can begin to understand just how large a "stimulus" or other intervention would have to be to make a meaningful impact.
There is no doubt that a rapid and severe deflation of prices in equities, real estate, commodities and other financial instruments has happened. This is not good news for debtors, and it makes it very obvious that the Fed and other government agencies have no real control over the economy when the bubble has burst. They contributed to the blow up, but now their ammunition is spent.
The only remedy is to unwind government spending and rejuvenate the economy through lower taxation and by making sure the country offers the highest incentives for worldwide investment. The only way to attract business and investment to this country is through low rates of corporate taxation. You cannot possibly spend your way out of debt.