John R. Carroll wrote:

No George, but we will likely have what is the "reasonable" alternative.
Thinking that what's gone on to date has "saved" the US economy in any
serious manner is an illusion. Dillusional, in fact.
The only thing the world was saved from was immediate and catastrophic
collapse.

Our political leaders threw away a perfectly good crisis/opportunity to act
forcefully without the voting public caring much about the carnage.
That time has passed for the moment but such a time will come again early in
2011.
Employment has never been as low as it is right now and it's going to
continue to shrink.
Capacity utilization is also continuing to decline if you add back what's
being removed permanemtly or temporarily from the pool.
The US is six percent of the labor pool away from havimg the rate hity 50.
It will. That's sort of a tipping point, in my opinion, in a consumer driven
economy.

Regional banking institutions that haven't failed are extremely weak by any
reasonably prudent standard and they will continue to weaken. Those that are
failing now aren't in trouble because they weren't prudent. They are failing
because their customers increasingly don't have the income required to repay
their debts. This is one of the direct consequences of two income families
and the encouragement they got to take on debt at the two income level.
Another is that with two incomes, there is less pressure to keep wages in
line. Rather than increase the earnings of, for instance, a Mold Maker or
Tool and Die Maker, spouses went to work. That second income has proven as
problematic in the long run as it was beneficial in the short.

America, as an economy and a country, has fewer and fewer consumers, even as
families, able to earn enough to satisfy the obligations they have, let
alone go out and consume more.

Everything you wrote beyond this point is as completely obvious as it is
impossible to get done in our system.
Reinstating G-S alone would be catastrophic in it's consequences because it
would be so complicated a migration from where we are now. That's what
Congress has to deal with and they have decided that it's to complicated a
maneuver for them to enact as law.
I agree with them.

What I think is that we'll just fall completely on our collective asses.
Rebuilding from scratch was a real advantage for FDR and it will be for
Obama and his team.




The Soviet Union fell - into chaos.
Is that what we too face?