Here's what needs to happen: People need to start spending money. They need to see the value in spending even if they don't really have 'enough' to spend, so they will, in the future, then start having enough again. I get so upset sometimes at all the people freaking out over the economy and then holding onto every last dime and eating out of tin cans. If everyone just calmed down and didn't alter their lives so much when things get a little shaky, things would never get this bad as they are now(more than a little shaky, now we're in earthquake territory!). Sorry for being so negative, I was venting.
I don't think you have a clear understanding of what is going on in the US economy.
The spending was not a result of increased production, it was the result of home equity extraction available from housing inflation.
People were spending money they did not have, but were able to get away with it because their homes would continually increase in value.
As an investor, I knew that the housing collapse would rock this economy hard, I was expecting this well over two years ago, back when people thought housing was going to "pick up" or "turn around" by spring time.
America is broke, we have no money to spend, only that which we can borrow. The fact that our government is borrowing money to pass out as "tax rebates" is a good indicator of how broke we are.
Investors were hit hard as well. I was making 23,000 per month in passive income, only to have it reduced to 3,800 per month with a huge debt service to cover as well. I was going to quit my day job - thankfully I did not.
Huge losses to hedge funds as well. I have friends that have lost millions. This is all private investments, not stock in the stockmarket, as that is propped up by government and will come crashing back down as well, so there is more to come.
