Thursday, January 24, 2008

Wrong Action, Wrong Time

So the government is ready to step in, after already cutting interest rates in the biggest drop in 20 years.

Because, you see, the problem was caused by too much easy credit and free spending, so we're going to fix it by easing credit and giving people money to spend. We'll borrow the money from foreign governments--it's okay, they've got lots.

We can go through a relatively mild recession now, or a much worse one later. The housing bubble cushioned us from the effects of the dotcom crash. Now they're looking for something to cushion us from the housing crash.

I'd rather get it over with, take our medicine now, and get back on track. Trying to put it off only makes it worse.

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