Commenting on Romer's article, Yglesias writes

But even though unemployment was still very high in 1938-39, it fell dramatically during the 1933-36 period thanks overwhelmingly to things that were done on the banking/monetary side. Fiscal policy during the early Roosevelt administration, somewhat like fiscal policy during the Obama years, largely served to offset ongoing fiscal contraction at the state and local levels. Today, additional aid to state and local governments to forestall the creation of new restructuring problems would be very welcome. But today, as in the 1930s, the monetary lever could be very powerful.

Well in the Eggertson paper Romer links to, he writes

By any measure, the increase in government spending was dramatic, but the spending spree clearly violated the prevailing policy dogma of small government. Table 1 records several measures of government spending. The federal government’s consumption and investment, for example, was 90 percent higher in 1934 (Roosevelt’s first full calendar year in office) than in 1932 (Hoover’s last).14 Other measures of federal spending also increased substantially. Table 1 also reports total government expenditures. This measure includes several transfer programs and the gold purchases of the Treasury that are not included in the consumption and investment statistic, but which had an important impact on the government budget.15 This spending campaign was financed not by new taxes but by running budget deficits, thus violating another important policy dogma of the time: the budget should be balanced. Deficit spending plays an important role in the model of the paper because it measures the change in the inflation incentive of the government, which is crucial to determining expectations about the future money supply. The deficit during Roosevelt’s first fiscal year is one of the highest in US history outside of wartime. This helped to make a permanent increase in the money supply credible, thus firming up inflation expectations, because it was a critical strategy to finance the government debt payments. The deficit is defined as the difference between the government’s expenditures and tax revenues. Table 1 shows three estimates of the deficit, further described in the Appendix C. The estimate that corresponds most closely to the deficit in the model is the third one.16 The deficit, according to this estimate, increased by 66 percent in the fiscal year June 1933 to June 1934 and stood at 9 percent of GDP in that fiscal year. The other estimates show a smaller, yet significant, increase. Leaving measurement issues aside, however, there is even stronger evidence for the regime change than reported in Table 1.

It is quite likely that fiscal policy played a key role in firming up inflation expectations, since it was well understood at the time that deficit financing could lead to future inflation. In fact, the belief that deficits caused inflation was a foundation of the balanced budget dogma. Many commentators at the time, especially in the conservative press, were worried that Roosevelt’s deficit spending would in fact be too inflationary.19 As proof, many “sound money men” pointed toward the deficits of several European countries after World War I and the resulting hyperinflation.20 

Right now the government is engaged in deficit spending so more actions by the Fed could change inflation expectations.  But it looks like the government did a lot of deficit spending during the Great Depression, but maybe Matt is right that it was offset by cuts at the state and local level.

With unemployment at 9.1 percent, government cutting back spending, and the mortgage market in the dumps, could it be that QE1 and 2 helped prevent deflation> Would we have 2.5 percent annualized growth in Q3 (granted it may be revised downwards later)?

Well the economy grew at 2.5 percent so there is demand. Maybe unorthodox monetary policy can help. It helped during the Great Depression.