In the absence of all these government interventions, it is likely that the corrective phase of the business cycle would already be over and we would be in recovery mode. To be sure, housing would remain in a slump for some time to come, but restorative market forces would already be at work creating the next generation of companies and jobs.
If we want to avoid the next great depression, all such government interventions should cease. The Treasury Department should revise their recent action and turn their proposed conservatorship of Fannie and Freddie into a bankruptcy receivership that would ultimately liquidate the corporation and their liabilities. Meanwhile the Fed should announce its intent to stop Term Auction Facilities and close the discount window to all but its traditional customers. To reduce the negative impact of the recession, government should cease foreign hostilities, reduce military spending, balance the budget, and cut taxes and regulations. FULL ARTICLE