Why It Will Get Worse, Not Better.

The newest round of public money bound to be given to banks has stipulations attached that would require that the banks loan it out to consumers. The problem with that is that it will worsen the situation by creating more bad assets. How you might ask? Well, because banks will once again be forced to make loans to people who cannot afford them. Or are they going to legislate that consumers that can afford to repay loans be forced to borrow the money as well? could it be possible that our leaders are really just that stupid? The people who could afford to repay new loans do not want or need them now. They are savvy in uncertain times, tightening budgets instead of increasing them. Why would any sane person want to borrow now and increase their debt?

Government first needs to repeal the bad legislation that forced the banks to make bad loans in the first place. Secondly, remove the bad assets from the market. Thirdly, stimulate the economy. And it needs to be done in that order to gain any traction against the rising tide of bad economic news.

FDR's policies lengthened and worsened the pain of the Great Depression (recovery from it) precisely because of the same reasons mentioned above. FDR's polices were not effective then and will not be effective now either.