Useless Warrior

Yes. It's exactly what most economists would say to do. During a recessionary period, the Fed needs to push money back into the system and encourage private investment by decreasing interest rates. The BIG problem that has delayed the process/effect is the credit contraction which occurred with the failing of several large financial institutions. It doesn't matter how low interest rates are or how much money is sitting in the banks if the banks become too scared to create loans. Obviously, banks are feeling more secure now and are creating loans -- they just aren't creating the insanely risky loans they were prior to the banking crash, which were, of course, the cause of the crash.

Without being overly political about it, we (our financial gurus) allowed the banking system to become more corrupt than usual by the influx of foreign investments which were necessary to fund the wars in Iraq and Afghanistan. We needed the cash and they wanted to invest with us. When the banking community said they were running low on worthy loan applicants, the foreign cash holders (China, et al.) suggested that we decrease our standards for giving credit. Greed and ignorance took over and here we are today with tens of thousands of bad loans.

Also, for those of you who don't realize it, the bail-out of the Big Three is nothing new. They've all received many bail-outs over the last several decades, just as the airlines have -- no matter who has been in the White House. People are only up in arms about it because all possible shit is hitting the fan at the same time.

Though politics will be played and the talking heads will rally their fan base, there really isn't all that much political about what the Fed, the FOMC, and others are doing to re-stabilize our monetary and fiscal practices right now.

By the way, I just tested out of Macroeconomics the other day. Ask me any of this in another month and I won't remember fuck-all.