The Bush and the Obama bailout plans are bound to prolong the recession/depression. It is shear folly to bail out incompetent/crooked bankers and borrowers. An efficient economy works best in both the short and the long run. Government intervention does not an efficient economy make!

The real problem, however, is that the production of consumer goods no longer contributes much to this economy thereby excluding millions from participating in the one positive economic activity, i.e., creating wealth by changing raw material into desired items. For this economic activity to flourish requires a minimum of government interference, but, alas, the genie got out of the bottle!

China, with its vast labor pool is rapidly industrializing. So, any regaining of the previous productive capacity here must be in competition with China and that will result in a levelling of the living standard here with that of China.

This, then, is the real cause of the present economic recession/depression and the subprime mortgage fiasco was only the symptom caused by the Federal Reserve trying to solve the real problem of a decling economy by drastically lowering the prime interest rate beginning about 2001. This, in turn, caused mortgage resales to be extraordinarily profitable and led to the subprime mortgage crises.

The real solution is (1.) to drastically cut government expenses and (2.) to eliminate all types of economic interference in the economy such as taxes and regulations and (3.) to go back to a gold monetary standard.