From NakedCapitalism...

"Policy-makers not only misunderstand the economic crisis, they continue to underestimate it. Consequently, solutions to date have not only failed to "fix" anything, they have made the problem worse. The problem isn't falling asset prices, it's not rising foreclosures, it's too much debt." (Rolfe Winkler writing for NakedCapitalism)

A great point is made here. Watching Chris Matthews, it was interesting to hear Newt Gingrich explain how extending more credit will make our current problems disappear.

On NPR last week, Richard Koo, an analyst of Asian economics was discussing the Japanese "Lost Decade". The interesting points can be summed up thusly:

1. The Lost Decade wasn't one long recession. It was actually a period of low growth.
2. When people's balance sheets are wrecked due to purchases made on credit, they tend to eschew credit (often for a decade or longer).
3. In Japan, the means that the government used to keep the economy going was public infrastructure spending.
4. The biggest error the Japanese government made was to begin trying to deal with the deficit prior to their being a clear end to the economic malaise.

Food for thought.