Gandalf: Short answer? I have no friggin’ idea. We appear to be playing out of the Japanese playbook, circa 1990, and we all know how that worked out.
I believe that large-scale infrastructure spending is definitely needed in this country, especially in light of the fact that much of our highway and road network dates back to the Eisenhower Administration. However, if you look at the stimulus package, much of the spending isn’t big enough or well targeted enough to have the necessary impact.
As far as “quantitative easing” goes: Well, that’s just short hand for printing money, right? From an Econ101 standpoint, I do remember that running the printing presses long enough would probably generate sufficient inflation to enable significant debt destruction. It seems that Bernanke and Company are trying to kickstart M0 (the so-called “power money”) and break through or out of the credit crunch and they’re gonna run the printing presses till they do, or die trying.
Will any of this work? Like I said, I have no friggin’ idea. But I will say that I don’t see the US going fascist. Not to draw any odious comparisons to the 1930s, but they’re instructive at least in the sense of the divergent directions that the US and most of Europe took.
The US possesses the world’s largest military, we are still the world’s reserve currency (for as long as that lasts), we have abundant natural resources and enjoy (to steal the British term) “splendid isolation”.
I think that life as we know it will profoundly change and for the better. I think a simpler, less materialistic lifestyle will do all of us some good, especially the Lexus driving, latte quaffing, narcissistic pricks in the group.
I think San Diego RE rebounds fully on the 2nd of March, 2012 at 11:17a. Just guessing there.
