by sniglet » Fri Aug 29, 2008 9:10 am
Unfortunately, I don't think it matters who becomes the next President. The credit contraction goes BEYOND the capability of any government or leader to deal with. So much mal-investments, and poor loans, have been built up over the years that there is no power on Earth that will prevent the economic purge that is in the offing.
At best the government can maybe prolong the downturn with massive "stimulus", which will only serve to delay the purging of mal-investments. This is what happened with FDR. Instead of a short-sharp, depression, the US suffered a decade long decline. Unfortunately, I fear that "stiumulus" and future bail-outs will be in order regardless of whether McCain or Obama gets into office. When the voters are screaming for "help", their politicians will oblige. Heck, even Bush signed onto "stimulus" legislation as well as bail-outs for the GSEs.