[quote=DWCAP]……(how many expert 5star party planners or luxery car maintaince workers do we need???) that the economy doesnt really need. Not to mention all the luxery cars and houses that have little demand but already exist, weighing on future supply/ prices…..[/quote]

Intellectually, there is an argument between those who argue that what we need is mostly just a boost in aggregate demand, and those who argue that we need a restructuring more. If the demand diagnosis is correct, it can be partially cured by maintaining high asset prices (aka bubbles). If the restructuring diagnosis is correct, then we need to deflate all the asset price bubbles.

In reality, Bernanke and Geithner and Summers and so on are part of a community that needs a continuation of high asset prices to prosper. They will therefore favor the first diagnosis, using just the supporting intellectual arguments, of course.

We will get our restructuring only when all other options have been completely exhausted. We will quit our asset price bubble addictions only when all sources for getting high are completely gone.