No amount of cash has yet been able to make up for the toxic loans on the books. Therein lies the problem.

 

Meanwhile, the main part of the banking system is saved, and we should let the weak sisters disappear, including the auto industry. It's time not for more bailouts, but for some of these companies that are failures to restructure under our bankruptcy laws.

 

Also, a lot of decent companies have probably seen their lows. It's not as if the whole world is going to go under, only a lot of the bad ones. This recession is serious because the government took it upon itself to spend us out of a lot of prior recessions, thus avoiding the efficiency of failure. Learn to embrace the failure. It is your friend and leads to rewarding of the efficient. That's how free markets work. They don't revolve around government spending or bailouts.

 

At this point, the more government spends and creates debt for future generations, the longer will be the recession, and the more serious it will become. We NEED velocity to money and we don't have it because the government policies of encouraging bad debt have consequences, and one of those consequences is fear. Anyone with a buck wants to hold it, not spend it. If the Obama government continues with bailouts, the government can destroy the treasury market.