> will Cash Plan
> Geithner actually make conditions worse -- or, as you implied
> when you mentioned the Japan option -- prolong crisis by shrinking from
> what really needs to be done?
Infinitely worse. The problem is that the US economy (and much of the world-system) needs constant inflows of fresh credit. Until the banks get fixed (debt write-offs and restructuring), things are going to spiral downwards, in the classic deflationary cascade of zombie debts biting good debts, turning them into zombie debts which bite good debts, etc.
It's true a massive wave of government spending will hit the world economy later in mid-2009, which should turn things around. But I worry about things spiraling out of control between now and then. The "worse-is-better" crowd is wrong. Worse is just plain worse.
-- DRR