Is government part of the problem, or the solution?

Government is the problem - when right-wingers run the government. It's the solution when liberals run the government.

That's my beef with the bailout plan. It certainly doesn't shift that ratio towards solution, and may ultimately make things worse.

Right-wing corporatists comprise all the Republican party and half the Democratic party. Therefore you can be sure the sellout will make the problem worse.

Economies necessarily evolve from the bottom up, not from the top down. You can't start up an economy from scratch with big bankers, you start with the production of necessities and basics and generate demand for luxuries and services organically.

It is necessarily the same for economic recovery: you take care of the people on the bottom first. The U.S. has a credit squeeze quite essentially because banks believe they and their business partner banks aren't going to get paid by their debtors, meaning homeowners. This means you help homeowners, not the bankers. Giveaways to bankers do nothing to solve the problems with the real economy with which the bankers must do business.

Under the bailout plan, the troubled assets move from the banks’ books to the Treasury’s. But the underlying problem--the continuing diminishment of mortgage and home values--remains and continues to worsen.

The origin of the crisis is at the homeowner level. Homeowners are defaulting on mortgages. Moving the financial instruments onto the Treasury’s books does not stop the rising default rate.

The bailout is focused on the wrong end of the problem. The bailout should be focused on the origin of the problem, the defaulting homeowners. The bailout should indemnify defaulting homeowners and pay off the delinquent mortgages. The financial instruments are troubled because of mortgage defaults. Stopping the problem at its origin would restore the value of the mortgage-based derivatives and put an end to the crisis.

Severe recession is certain even if an effective mortgage-default solution is implemented. Banksters want to be protected from a recession - hence a sellout aimed at the banksters. But selling out to the banksters guarantees a depression - for everybody but the banksters. So a depression you will get. For 15% of the U.S. population or more it is already a depression.

Yes, that is a prediction.

Is government part of the problem, or the solution?

Whaddya mean, "or"? It's both. The trick is to shift the ratio so that it plays much more of a role in "the" solution than it plays in "the" problem.

That's my beef with the bailout plan. It certainly doesn't shift that ratio towards solution, and may ultimately make things worse.

"A strong conviction that something must be done is the parent of many bad measures." -- Daniel Webster