First, the financial issues America is facing was "contained" to sub-prime, then just one or two financial companies, then just wall street, now affecting only the world financial markets.
The actions being taken have been spun to protect "Main Street".
Main Street is being affected, but I still contend that Wall Street reflects the health of Main Street, not the other way around. As shown by the picture main street is starting to really feel the pinch, a long line for low paying 80 jobs. Further, U.S. Retail Sales Slump 1.2%, Most in Three Years and U.S. Industrial Production Fell 2.8%, Most Since 1974.
Expect further declines as consumer sentiment in USA, Canada, India, and others hit decade lows.
All of the actions taken to "protect" main street will actually cripple main street for the decade(s) to come. How? With higher taxes, higher interest rates, and eventually (6 months to 2 years from now) hyperinflation. Main street is already being crippled by seeing Mortgage Rates Post Biggest Increase in 21 Years.
Layoffs and businesses continue to close, Linens and Things going out of business and GM to lay off 1,500 workers in Michigan & Delaware.
The Federal government is spending money at a break-neck speed. The Federal government is backing most risk, including Commercial Paper Subsidies.
With all this spending, we may eventually see the Federal government be downgraded from AAA to lower. States are already being downgraded as Rhode Island's GOs to 'AA-' to Outlook Stable, which results in Rhode Island paying higher interest on all it's debt, further restricting that states actions.
The BEST action to protect main street isn't to "back" all debt, but to keep the US government strong by not compromising it with unprecedented debt. Further, the reckless actions of the government printing money will eventually yield adverse effects, such as interest rates rising, further hurting main street. There will be a time that the US government will truly need to spend billions if not trillions of dollars to help the country, but I fear when that time comes, the ammunition will have been spent.
This is not to say we won't see a stock market spike higher, nothing moves in a straight line. But all of the action being taken still doesn't address TRUST. I still can't see how the government can spawn co-operation and expansion without it.