Debt is the Economic Problem
Our problem is NOT unemployment, or it is NOT housing. Our problem is debt. And we have more of it now! When we borrow, banks create new money. This inflates the money supply and causes an economic boom:
http://www.tradingstocks.net/html/banks_create_money.html
We borrowed from the future. The future is here. The good days were moved from today, to the past! Total public debt debt per household is around 200K USD. That is more than the average home price in America. What does that mean? It means even if you paid your mortgage, you still owe as much as an average house!
The private debt is even worse! Our entire money supply is borrowed money. When we borrowed, we promised to pay back with interest! Principal + interest does not exist. Therefore it is not possible to earn it to pay it back with interest! That is why previously fine individuals and businesses are going bankrupt! the crash is built into the monetary system. It cannot be avoided. There is no free lunch. What was borrowed from the future will be paid back. Here is the debt problem that is causing deflation:
http://www.tradingstocks.net/html/inflation_deflation_credit_bub.html
The fix is to embrace the recession and reduce debt levels. Government spending is not going to fix this. Keynesians are dead wrong. By the time this is clear, United States will be bankrupt for good! Better get serious about debt and reduce it in an orderly way now! Borrowing from China to buy Chinese products is not going to get us anywhere. We are not investing the borrowed money to increase our capacity (We already have excess capacity). We are borrowing to sustain consumer spending. Consumer consume. Only producers produce. If we are going to borrow, we should only do so to create value that there is a demand for. If not, do not borrow. It is a dead end!