What would Friedman do?

Exactly what the Fed is doing according to this WSJ article.

I have argued a number of times over at Ace of Spades (and a couple other places) that Bernanke is following the course of action that Friedman advocated (which Hayek later endorsed btw)  in “Monetary History” and that by following the measures advocated by Rush Limbaugh, Glenn Beck et. al. we are dooming ourselves to a repeat of Japan’s lost decade. 

This isn’t an endorsement of unrestrained government spending by any means however.  As I noted previously Japanese economists tend to think that a program like that (i.e. the stimulus) is a colossal waste.  What I am saying is that experience has shown that some intervention by the Fed can help lead to an economic recovery.