The problem is that the fundemental sickness in the Us economy hasn't been addressed. In fact, with Fannie Mae handing out those 125% mortgages it would seem that they haven't learned a thing from this crash. The total debt load of the average US household is approaching $700,000 (combined personal and government) and there's no way that can ever be paid. It will have to be accounted for somehow, and that's why the foundations of the US economy are crumbling. Anything they do that doesn't address this problem is only prolonging the inevitable. I fear (and so do some ecnonomists) that the current uptick is merely the stimulus bubble, and it will burst, leading to a crash that makes the last one look like a picnic.
That being said, I fervently hope I'm wrong. I'd much prefer a recovery and I'd happily give full credit to Obama if he can pull it off. But don't hold your breath; if he's dumb enough to implement that cap and trade tax, the result from that alone will be catastrophic.
It sucks being a pessimist.
You make a good point, Extrafire, debt (and deficit) indeed is a big problem, and that is where the unstoppable object may hit the immovable wall. Deficit problem must be tackled at some stage. However, now is not the time to tackle it.
There are tentative signs that economy may be stabilizing, the worst may be over. Once the economy is roaring ahead, Obama and the Democrats must do something to get rid of the deficit. Paying down the debt comes later, once the deficit is under control. Perhaps Obama could appoint a ‘deficit czar’, Clinton, since he has experience in eliminating the deficit.
But you are right, if deficit is not brought under control, USA is strong trouble for itself.
But don't hold your breath; if he's dumb enough to implement that cap and trade tax, the result from that alone will be catastrophic.
Now here I disagree with you. First, there are no indications that cap and trade will pass, I understand it is in trouble in the Senate. Second, even if it is passed, I don’t’ see anything catastrophic about it, it probably will stimulate green jobs. Incidentally, even if McCain had been elected, cap and trade would still have passed, he was a supporter of cap and trade.