SPOOKED!!!!

The American Consumer is scared. Holman Jenkins wrote a fantastic piece on the WSJ about how the supply of money isn't really in short supply, it's the demand. Americans are caught in a vicious cycle of savings!!!!

Now, I'm joking slightly, but the truth is because we're told how bad things are out there, how they're only going to get worse, how for the last 18 months we heard about "failed policies" ad nauseum, and we watch Congress and the President cram though enough spending to fund the Iraq war (AGAIN) in three weeks, it scares us. Lots of folks have lost their jobs (so they can't be spending), but I know personally, after we got a little bonus, we went a little crazy with spending, but we've dialed back too.

I've lost my faith that the government can spend our way out of this mess. My friend Geoff suggested to me that the government could consider, rather than giving the money to the banks and demanding they lend, give it to the homeowners (ALL of them, not just the idiots who borrowed too much because someone said they could) a one time voucher to be used to substantially reduce their first mortgage debt. It would help with the folks who's mortgages are inverted, spur purchases and refinances, and ALL the homeowners would benefit.

How about it???