It struck me this week after having some discussions with some Wash
DC inner beltway types, someone at the IEA, and someone at the Fed, that ….they don't know what to do. from an an interesting short article over at the The Oil Drum. Not an article really, just a couple of lines, a comment, about the current economic situation and how to get out of it.  

It seems to me that there is no solution. We had an economy based on an unsustainable source of money: the constant increase in the worth of our homes and other assets. The well being of our country – our culture – has been based on spending more money than we made – than we had.

I think that the ramifications of this run deeper and stronger than we are willing to admit. Buying shit has become our major entertainment.

What we don't know what to do is how to do is how to bring the economy back without spending more money than we make  – again. The government can do that short term but there is a lot of resistance to doing it long term. We are already upside down because of our wars, among other things.

But even if we decided to continue to rack up the National Debt, I don't think we can do it enough and long enough to make a permanent difference.

Even if our massive unemployment – and it is much bigger than the official figures show – ended – let's say by magic – and everybody started spending money; we would still not be spending what we need  to be to bring the economy back to where it was before it crashed.

I suspect that this is the new normal and we had better get used to it.