I'll ignore your subsequent equivocation and just look at the common meaning of the word. At issue regarding our possible deflationary slump and spiral (as Japan experienced in the previous decade) is that question of demand. The bailed-out banks aren't relending to the poor risks, and that doesn't count. But it will be interesting how people react to events the rest of this month (and year) and next year. The fools who expect or _demand_ that people spend money or borrow more are just that, fools. They won't if they don't wish to, if they prefer to save, or if they feel insecure. Here in Detroit, people are still driving as much as they have for the past six months, and are still using credit cards for routine expenses (as I have observed in both cases every day and night). But there has to be a limit eventually, and I am curious if it will be triggered by the end of _personal_ debt, possibly if banks reduce credit line limits as part of overdue reforms (as well as in response to new laws that will take effect in 2010 — the banks may not wait to begin making changes until then).

Our past decades have featured inflation (actually killed in the last decade or two, but people still recall the run-up in the 1960s and the bad 1970s). There was a possible triggger to the current slump when oil prices went up — again, people didn't curtail much driving, but on everyone's mind was the ripple effect throughout the economy of petroleum price increases, eventually. But what we see now with the drop in oil prices appears to be early evidence of a kneecapping of demand. And don't expect any massive (and often too-expensive and bloated) infrastructure projects and other public works projects to solve this problem. It didn't solve it, was no guarantee of solution, in Japan.

As to borrowing, while so many on the Left have been on record as saying deficits don't matter (and they should be delighted to see vast public spending, as all of us have already anticipated), and have fought the balanced budget reforms one by one in the federal as well as in state governments (to this day Dems like Rangel dislike “pay-as-you-go” constraints on new and increased spending by Congress), at least some older liberals are as upset as non-liberals have been with the idea of borrowing to pay for spending, greatly increased spending, by the federal government (and in the states, too), and while we're nowhere near a “debt trap” here in the States yet, certainly there is concern and resentment among some liberals that any desire to do a textbook Keynesian attempt at stimulus by spending that is financed by borrowing, is subject to the accomplished fact that our debt level is already high as an absolute amount and a non-trivial fraction of the GDP, and this must inevitably be a constraint on the borrowing the Dems would like to do to finance so much of their chance to engage in truly massive spending. And the earlier debt really cannot be justified, no more now than it ever could have been.

I wish he had been more conventional and correct and state that the big picture remains overall that Detroit's and governments' budget problems are mainly due to excess spending and the solution is not to rush to raise taxes (or Detroit-built automobile prices), and that a bailout is wrong, that moral hazard is moral hazard. (The counter-argument is that the bailout would prevent worse problems, which is a logical argument, though what you see as with other government activity is unintended if not unpredicted consequences that are deleterious.)

It would have been better for him to emphasize that the nature and scope of any bailout should be limited and that the federal government and wacky environmentalists not be permitted to ruin the companies or otherwise not let the federal government play “corporatist state” Mussolini-style games with nationalized “American Leyland” or “Amcars.” [rolling eyes] And no “fee-bate” enviro-wacko schemes should be unleashed by the Obama team next year on auto buyers, or stupid horsepower or engine displacement or weight- or dimension-based taxes on vehicles, or “greenhouse gas” taxes on fuels. (Taxes on fuels should be aimed at actual pollution and mitigating externalities, not levied in support of the Convenient Religion of “global warming,” “climate change,” or whatever the next mantra of this fad and crusade happens to be against the demons of Carbon and Progress.)

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> Obama and the DemCong reinstitute the teachings of Das Kapital

First things first. Keynes (that is, when he was arguably relevent, during the Great Depression, not during the relentless continuation of interventionism for decades afterward) deserves a fair trial. I suspect that Obama has already learned the most harsh lessons of our 1960s and 1970s extreme idiocy. After all, New York bankrupted itself in ways similar to how Detroit has bankrupted itself, as nearly have many Blue states. It remains to be seen how a federal bailout of failed states (pun intended, for it's no joke) would (as it should) constitute a form of managed bankruptcy (and as I've said elsewhere, federal receivership, demotion to territorial status and neo-colonial administration, and all else that such failed states deserve in exchange for rescue when they have not reformed). So far it's conventional spending (now up to a total promised to be one trillion dollars, perhaps because such a term gives certain people the Hope they seek).

Conservatives lost the election. Michael Reagan's opinions were voted out of favor.

Where the hell is the relevance of the day………..what Obama thinks is the only thing worth posting in a political forum for the next six months.

Only after Obama and the DemCong reinstitute the teachings of Das Kapital for awhile will conservatives regain any rightful voice in the mix.

The small businesses he touts are being so important are suffering now because of large corporate shortsightedness and greed, slashing the availablilty of important credit lines to even low risk borrowers. No tax break for the wealthiest top tier is going to help them, cash infusions to the banks haven't resulted in loosening the credit freeze. Banks are just sitting on the money to keep their bottom line looking healthy till the end of the year so that managers can get their bonuses.

I'm not sure what high tower Reagan is peering out over America from, maybe he's on his yacht, but he certainly can't admit that his and his father's economic philosophy had failed the country.

The market isn't perfect. Largely because the assumptions of perfect information, perfect competition and no transaction barriers aren't met. That is part of the role of government.

Cutting cap gains taxes isn't the answer because it isn't going to help the people who drive this country – the middle class. These are the people who are struggling to make ends meet as their retirement accounts have crashed, their wages haven't kept up with inflation, and their jobs are far from secure. They don't have money to invest even if cap gains taxes are zero. They are too busy trying to pay the mortgage and keep food on the table while praying they can keep their jobs.

Supply side economics doesn't work. Personally, I think we need to focus on demand side economics. Have the government start demanding services that are needed – such as green technology, infrastructure, manufacturing, etc. Make sure that people can afford to buy goods without resorting to credit which means trying to exert positive pressure on wages and decreasing the tax burden on middle class and shifting it to people who can afford to pay it. Find ways to decrease income inequality. I don't mean everyone should be equal, but having the wealthiest 1% own the share of wealth that they do isn't efficient. Economic studies have shown high levels of income equality hurts economic growth, especially in developed countries. We need to have policies that address that rather than promote it.

All of those Wall Street wizards , auto and banking CEO's who once complained that government was the problem have lined up at the Capitol door– hat in hand. The middle class is slipping into the lower class, the lower class is slipping down to the homeless and jobless.

The roots of the problem are the causes I mentioned- to rebuild the economy we must learn to live within our means, curtail the power of corporate lobbyists to write policy and reinstall reasonable regulation over financiers, reinvest in our infrastructure and manufacturing industry.