A very good read on the reasons for the recession and WHY the government's solutions will not work... they are focused on the wrong problem..  The consumer is not going to be primed into a spending mode.. Consumer habits have shifted to saving more.  Government "pump priming" will not lead to a sustainable recovery once the "stimulus" ends.

http://www.city-journal.org/2010/20_3_free-marketeers.html

Cochrane and Taylor, among others, believe that the panic that froze credit for a year beginning in 2008 was a direct consequence of how the government intervened after the bubble burst. “The banks probably had to be saved,” Cochrane tells me, “but the problem was that the salvation followed no pattern.” Some institutions, like Bear Stearns and Wachovia, were rescued; others, like Lehman, were not. It became impossible to know what the government was going to do next. “If governments couldn’t be predicted, nobody could be trusted any more,” Cochrane explains. Credit froze. “We knew, from a theoretical point of view, that without trust there is no market,” Columbia University’s Pierre-André Chiappori says. “For the first time, we saw the theory confirmed in practice. Regretfully, our textbooks were right.”

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Every economist I interviewed agreed that ballooning American and European debt poses a huge threat to long-term prosperity. The debt will be paid either through inflation, which would make everyone poorer, or—a far better scenario—through economic growth that would increase both individual and government revenues. Unfortunately, by increasing taxes and imposing the wrong regulations, Western governments are hindering entrepreneurship and hence growth, Cochrane says.

As in the 1930s and 1970s, so today: crises are a serious problem, but misguided economic policy makes them worse. After the 1930s, only war production could overcome the negative economic consequences of the New Deal. After the stagflation of the 1970s, it took the bold leadership of Margaret Thatcher and Ronald Reagan to reorient the West toward free markets and prosperity. How long will it take this time before governments understand that overreacting to the crisis and imposing disproved Keynesian remedies will dampen and delay economic recovery?

The answer depends on the ability of free-market economists and commentators to communicate their narrative of the crisis. We sadly lack someone like Milton Friedman, who could effortlessly convey complex theories to a large audience. Enough talented economists are on hand, however, to build the platform that we need for a free-market revival.

Guy Sorman, a City Journal contributing editor, is the author of Economics Does Not Lie and other books.

well said.