the recession; getting us out...

Econbrowser on Finding the Exit:

One view of the current situation is that the core problem at the moment is that consumers are too frightened to spend and banks too hamstrung to lend. If that was your view, you might think that the goal of policy is to spur households back into borrowing and banks back into lending. But when I look at the three graphs above, my reaction is that it's neither feasible nor desirable to return to the ratios as they stood in 2005. The low saving and high leverage that we saw in 2005 were an anomalous departure from the likely sustainable steady-state values, and there will be no road that leads back to those from here.

If that's the case, then resuming economic growth requires replacing spending on consumption and residential fixed investment with nonresidential investment and net exports. But charting a course for how to get there is profoundly challenging-- what firm would want to invest in the current environment, and which country is in a position to increase their purchases from us?

So Plan B, at least in the interim, would seem to be an increase in the fraction of GDP devoted to government investment.