Obama's economic stimulus package?

Its not clear really, there are no "Experts" on the issue, no one knows what will get us out of an economic collapse like this because every economic collapse is different and the causes of it are not really clear.

The fear is that if governments do nothing then it will mak it worse in the short term, I.e job loss more rapid. However others think that the government should soften the fall so that economy doesn't drop off signifcantly.

IMO the economy collapsed because we had a housing bubble. Everything about making money was tied into housing, including the banks who collapsed. When people started defaulting on their mortgages the banks went broke because they make money from people repaying loans. Banks expect about 1-5% of people to default on loans not enmtire neighbourhoods. Since the price of housing kept rising, banks thought that they could give loans to anyone without consequences even if they had a history of not repaying loans because even if you can't pay it back they will just take back the house and put it on the market for more money(this was when housing prices were going up like crazy and there were shows like flip this house on every channel).

Once millions of people had to declare bankruptcy(thats the only way to get out your old mortgage of the bank loan you can't repay) it means you stop paying all your bills pretty much and lose all your assets. Now lets see if you lost your house and lived in your car would you spend more or less money provided you still had your job? Probably just save right.

Now that say your neighbour loses his house, that makes your property values drop and it makes your payments go up. Your value house drops because the bank looks at neighbourhoods when evealuating property. No one wants to live a neighbourhood that looks like the day after tomorrow. Once you start to have lots abadaoned houses the homeless start to move in. Even if they don't thats the way the bank thinks. Now your rates go up even though the government drops their intrestest rate because the bank needs to make back the money it lost from your neighbour decalring bankruptcy and that means everyone gets punished with higher intrest rate because 1 bank loan officer wanted a bigger bonus.

Now that you have to spend 300-600 dollars more a month paying the bank higher intrest rates you spend less on other stuff that are non-essential and you get a recession. People delay buying new things that are non-essential you wait longer to buy a big screen or a car.

There are two ways the government can stop this. 1st, was when people started defaulting they could have stepped in and gave them fixed rate mortgages to prevent them from losing their house but more important to stop defaults which will keep you, the home owner who did nothing wrong, to keep your rates from going up because your neighbour defaulted.

The second way is to make a new bubble. I think green power would be the most likely Green power basically can work like the housing bubble you see. Firstly it will lower transportation costs (now that say our cars run on electricty or hydrogen rather than oil) which will slow down or stop inflation and can cause prices to fall which will make people spend more. Further we have lots of old coal power plants, people don't like nuclear, and green jobs are harder to export. Green jobs could probably pay decent, from my understanding you get 55 an hour to put up wind mills.

America can't go back imagine the world like a ladder and america at the top and china in the middle. America can't produce steel again, we can't compete with china in low wage jobs, but we can add an extra piece to the top of the ladder and move up. So we can make green energy something china won't do and can't do right now like green energy. They don't have the will power as they are too poor to invest into a new sector.

So yes if Obama puts all 800 billion dollars into energy we could have an energy boom and get out of this recession, hwowever, it won't happen that way because people like to play polictics with money and the senators and congressmen who come from places that are politically important but not windy or sunny, like Iowa or Ohio will vow to screw Obama come next election.

For example, Wyomin is a good place to build a wind farm or Texas and arizona for sun tiles but what is in it for democrats?