cheaprealty net

Subprime is only one part of the problem leading to recession , but it is just beginning, and it is a social problem as well as an economic problem.  The credit system is at the heart of the economy, which is going to cause the entire economy to slow down.

Not only that, but banks have holes in their balance sheets, and don't know how secure they are. 

Interestingly, he points out the best bang for the buck for a stimulus package would simply be to increase employment insurance.

The other major damage is going to be to local and state tax rolls as property values fall. 

The idea of encouraging more spending versus more savings is probably the wrong approach.