As I have said before, the media lives off bad news and they enjoy playing up the prospects of a recession and stock market crash, housing crash, credit crash, etc. And while I believe the media does play some part in the recent down turn the economy, other factors obviously are at play here, including inflation due to higher energy costs which forces all prices higher.
So, what can we do to fix these problems is the question on the mind of analysts all over today. Of course, I have a few opinions that probably won't be overly popular but here goes:
1) Drill for oil everywhere. It has become apparent that OPEC has no interest in helping the American economy by increasing the output of oil so America needs to take care of itself by finding more oil in Alaska and off the coast of Florida and wherever else reserves may be. Also get back to building some power plants. Nuclear is the way to go to get the most bang for your buck...it's proven safe over the long haul and cost effective. Continue to develop alternative solutions for energy issues longterm but we're looking for answers now.
2) Encourage lending. Instead of threatening banks with investigations, continue to encourage lending to credible lending risks. Obviously, there has been some lending to unreputable sources that is causing a problem but with the threat of investigation, banks become apprehensive to lend to anyone. That just continues to prolong the suffering of everyone. Lower interest rates should encourage people to borrow.
3) Make the Bush tax cuts permanent. The more money people have to spend, the more money will be pumped into the economy. Tax rates are just ridiculously high. You cannot tax the economy back to life. No country has ever taxed itself to prosperity. Let citizens keep their money and everyone benefits.
Just a few ideas there. Personally, I don't see this momentary stagnation of the economy lasting for a long time. Everything has a way of balancing out and this is a correction brought on by an overly agressive housing market and external forces that we should have addressed long ago. I still see good days ahead for the American economy.