"This situation" is kind of complex. As for the recessionary part of it, the plan that Obama's advisors have come up with is pretty much Keynesian.
Good for you. Where are they getting the money they're lending to you?
Unless things have changed, credit unions operate like small, old-time banks. They're using individual deposits as reserves, and loaning out money to individuals. There are a lot of small banks around the country that are doing relatively well right now, using that old-time model.
But they're not in the mortgage business in a big way, and they aren't a real source of capital formation for business. They can thrive in this economy because there is another layer -- actually several layers -- above them, that are doing the real capital formation and business lending. Credit unions and small banks depend on a healthy level of economic growth going on around them.
Most things are pretty cheap. Food is not, but look around at clothing, residential building materials, etc.
As someone who doesn't want to buy stuff, you're part of what's causing the downturn. I say that tongue-in-cheek, but I think you recognize the irony: This is an economy that depends heavily, something like 70%, on consumer purchasing. Without it, there is nothing for anyone to do. Unemployment ran up to 25% or so in the '30s because no one was buying, company's laid workers off, and then nobody had a pot to pee in.
Who is it you're talking about here?
There's really no choice. The question is where to pour it. Nothing is certain there. And it isn't certain how much will have to be poured.
What *is* certain is that we're on a deflationary sleighride downhill, and we know where that goes if we don't stop it: Depression.
Unless you know where to cut out enough spending to do the trick. (The answer is, nowhere.)
There may be some devaluation. But when our economy starts moving upward again, the value will return.
If you think about what you're saying, you mean that the consumers will start consuming, or we'll be up a creek.
-- Ed Huntress