Reply #40: Time and de-leveraging. Just like all past economic crises.

[theothersnippywshrub]

Sensible regulation and fiscal policy can help prevent or lessen an economic crisis, but once one develops it takes time for asset values to stabilize and for businesses and consumers to rebuild their balance sheets.

The asset value which most needs to stabilize in this current crisis is home prices. Once they stop declining, the value of the securitized mortgages can be established which will stop the erosion of financial companies' balance sheets and allow credit to be freed up with a return to normal loan underwriting standards. Consumer balance sheets can best be helped by tax cuts to the broadest number of people possible and by bankruptcy law reform undoing the last bankruptcy law "reform."