Since 1992, 'recession' has been such a poison concept politically that it's been considered prudent economic policy to borrow money to avoid it - and to relax regulations that prevent the market from becoming a big ponzi scheme, where wealth is created by 'hoping' someone else will be left holding the hot potato (the hot potatoes being bad mortgates and credit default swaps and such things).

Though this is a bit different from 1929, I'm afraid we're in a similar boat. Natural recessions have been staved off for so long that we really have an awful lot of wealth built up on nothing. Should we take steps to avoid another Great Depression? Sure, If we can. But I don't know if it is possible to avoid a huge correction in the markets. This bailout may just make the eventual, inevitable correction worse.You cannot sustain a life built on credit indefinitely. There has to come a time when the money is paid back. There's now a huge amount of money out there that's never going to be paid back. Therefore it's not. really. money. Oops.

I think that most 401K's and a lot of pensions are going to be lost. A lot of jobs are going to be lost too, and a lot of companies are going to go under. There will be inflation and wages won't increase. But I think we're going to be all right, because we will live in a world of reality again. Read this - it made me feel better: http://www.hpol.org/fdr/inaug/