Dorian

First, I am not an economist. And perhaps because of that, I do not totally digest or understand all the nuances of the economic crisis we are in as you describe, and all the reasons you provide as to why we got into such a mess and are not getting out of it.

But, more important—and I apologize beforehand if such nuggets are in your article, and I missed them—I would really appreciate hearing from someone who is obviously an expert, in layman terms, what we, the people, the financial institutions, and the administration/Congress ought to be doing differently to get our country out of this mess.

I am being very genuine in asking this, because sure as hell (pardon my language) I have not heard any alternate plans, except for lowering taxes, from any other experts.

And, if lowering taxes right now will solve our problems, please don't hesitate to tell me so and how.

Thanking you in advance,

Dorian de Wind

I did have a grammatical mistake because I my mind wandered, I meant that stepping in to nationalize the banks is the best chance of preserving other companies, which in turn will lessen pressure for real socialism, i.e. taking over production of industry.

If the government just let everything fail then the whole system would collapse and the economy would shut down as businesses couldn't use credit (unless the Fed started doing everything directly). The only other alternatives are to continue propping them up or do what they are legally required to do, which is to take over and shut down insolvent institutions, sell off the good assets and figure out how to assign losses to the bad.

So I guess Bush was speaking correctly when he said he had to dismantle capitalism in order to save it.

Quite frankly it's why businesses and capitalists should support the government taking over and dismantling the financial system piecemeal. Getting ahead of the curve in a way that would get rid of the deadwood and have the best chance of preserving productive businesses is the best way to avoid more straightforward socialism.

Sorry to sound so negative and paranoid, but if my goal was to completely trash the economic underpinnings of a country and to inflame existing class-warfare tendencies, with an ultimate goal of replacing the entire system with a State-based system, you couldn't do a better job than we are seeing now.

People aren't going to forget that when times got tough, we emptied the treasury and gave it to Wall Street. They'll wonder why they can't get in on some of that action to pay for their shelter, food and medicine.

There are two sides to induced inflation… on the one side you need it if you're trying to encourage economic growth. People won't hold on to their dollars if they are losing value each day, so they spend it or invest it.

On the other side, inflation saps the wealth of people who don't have enough money to invest, or aren't going to see increases in their wages any time soon.

It seems to me that most Americans, now more than before the current crisis, are in that category of people who aren't capable of investing because we're in debt and aren't likely to see wage increases because of a depressed job market.