I consider myself to be a practical libertarian. I suspect that the purists won't go for what I've proposed here because it involves the government getting involved with the markets and doing something that really isn't a valid function of government. I couldn't agree with them more. But that's where the 'practical' comes into play. We can do nothing. Basically that is what is happening now. If we continue down the path we are on, I don't see how we can avoid hyperinflation. If this 'recession' continues for any length of time, and it is bound to unless the government takes some meaningful action (and government infrastructure spending is NOT meaningful action), then some day in the future they will be refering to it as a depression. It is going to take considerable time for the private sector to shed it's debt load short of what I have proposed, even if the underemployed are able write off 40% of what they owe. And the longer it takes, the more massive the deficits will be and the sooner the social security upside down day will arrive. And don't count on the Republicans or the Democrats to do the right thing and correct the problems with the entitlement programs. If someone wanted to intentionally write a script to destroy our economy and way of life, they couldn't have done a better job than what we are facing now. Maybe that is what it is going to have to take, complete failure of the existing institutions before the bums are thrown out. The big question is, do we end up with freedom and go on to future greatness, or end up with totalitarian failure?
What I am proposing is a way to buy some time. It was the government that created the interest rate instability that forced lenders to resort to ARM's. Then it encouraged the irresponsible lending practices that led to where the housing market is today. Now it can create the necessary stability to make it all right again. I believe that Bush could have done it before he left office and the Obama could do it now, without congessional approval. Since it would be a lending bill, not a spending bill, I believe that it could be done by executive order. Once we get the country back to work, however; it will be necessary to change how Washington is currently operating. In my opinion, it will take a third party to reform Washington. But my thoughts on that will have to wait for a while. I've got taxes to do.