The US has really gotten into a mess which is creating further problems as the country is going under serious debt with the increasing stimulus packages that the federal reserve is lending to the financial institutions. The bail out package announced by the democrats of $778 billion, is not going to suffice the $248trillion economic crisis that had its epicentre in the US. The government is focusing on increased spending and is quite bullish & optimistic that this will take the country out from the hole. However, we are again repeating the same problem which created the economic crisis, i.e. allowing people to spend more of what they can really earn. The fed is putting more and more pressure on the consumers by giving them the leverage of spending the money, thus leading to a greater debt. The increased stimulus package may result in the devaluation of the dollar thus with the rippling effect of going further debt. There is a better way to get out of this mess than relying on a consumer-led recovery. The government should let and encourage consumers to put more of what they earn into their savings accounts and for banks to use this money for infrastructure and capital investments which in turn will create jobs and then automatically encourage consumer spending.
