The truth is something few want to hear because it means pain. What has to
happen is that jobs created by excessive credit must be allowed to liquidate. We
can't keep propping up jobs that shouldn't exist in the first place. Then
interest rates have to be raised to the point that they attract savings so that
the Federal Reserve will stop making money out of thin air. We're trying to
reinflate a bubble that popped. It won't work. It will only result in greater
debt, greater inflation, and a greater depression.
I will try not to over simplify this. The stimulus money propped up this leg of
construction. If they had not spent money on it. It would be big story of how it
contributed to the unemployment rates being even higher. Here is the real issue.
Banking practices especially mortgage practices created by government
intervention caused a huge problem. But it is not the only problem. Soaring gas
prices caused some nervous comsumers as well. Here are three keys to not fall
back into a ressession which is seeming pretty likely to me at this point.1. Create something of value. Something that can be exported. Industry
should have received the stimulus money. Road projects create or maintain jobs
short term. Creating industry creates jobs long term. Manufacture, and export
goods.2. Produce energy. Set up a comprehensive energy plan
including drilling for gas and oil, harnassing wind and water power, using solar
and nuclear power. Get the technology out at the ground level. Get fuel
efficeint cars out to the public, upgrade heating systems. Reduce dependancy on
foriegn oil. 3. Stop practices on loaning money based on anything
other than ability to pay.
Of course it didn't have any impact. We've never stopped building roads and
bridges. Even the State failed to cut road money to balance the budget (of
course, it really didn't meaningfully cut anything). The only way the
Government can intervene, if at all, would be to analyse what was really
effected when banks went belly up. That economic crash didn't affect the really
big budget items (those are funded be the Feds already), but it really hit small
businesses. Hit them badly.