> I wonder where all that increased productivity was wasted and by who.
It was stolen by the upper classes and distributed to the stock markets, which exploded in value. There's numerous graphs outlining exploding stock markets, C-level payments or rents over the last decades, but wages have largely stagnated. And yes, a bit of the stock market increase is due to QE policy flooding the markets with money.
That makes sense if you think of things in purely monetary terms, the money was skimmed off and given to the 1%.
It doesn't make sense if you think of it in terms of the supply and demand of goods and services. If demand exceeds the capacity of society to produce and import, we get inflation and full employment. The US has had modest to high inflation and high employment for most of the last decade. So clearly there isn't an excess of goods and services, because if there is, sellers undercut each other for market share which keeps prices down.
The money going to the wealthy through capitalist exploitation is mostly removed from circulation, see the marginal propensity to consume. It ends up in the stock market, or bonds or such. Taking money out of circulation is deflationary and makes the rest of the money more valuable; fewer dollars chasing the same amount of goods and services means lower prices and more purchasing power.
It was stolen by the upper classes and distributed to the stock markets, which exploded in value. There's numerous graphs outlining exploding stock markets, C-level payments or rents over the last decades, but wages have largely stagnated. And yes, a bit of the stock market increase is due to QE policy flooding the markets with money.