[CWuestefeld]

The goal is not to get you (or any other particular individual) to spend more, but to increase aggregate demand.

I'm assuming that the form of savings that you pursue is not "stuffing money under the mattress", but to put the money in the bank, or invest in equities or bonds or commodities.

If you invest in commodities, that is of course spending on commodities.

If you invest in stocks or bonds, you're providing capital to other companies, who will then spend it. This is good, but since some of their spending will be on facilities, it may not be the kind of spending we want (i.e., consumer good). On the other hand, some of it may go to paying for employees, which is obviously a very good thing, and goes to decreasing the uncertainty that you're concerned about.

And if you put it in the bank, it's going to be loaned out to either consumers for their own spending, or to business as discussed above. (caveat: so far this year, banks have tended to increase their reserves rather than increase lending. I think that phase is done, though)

[ibsulon]

However, the government is functioning like a corporation currently with its spending.

(And I'm not convinced banks are finished increasing their reserves. Wells Fargo is still in the danger zone after acquiring Wachovia, as one example.)

[CWuestefeld]

In a way, but it's doing so more like a drunken sailor than with any rationality.

The Austrian school says that recessions occur when the economy gets over-invested in some area. The recession occurs as we recognize that what we've invested in is not worth as much as we thought ("hey, these are just regular crackers!"). Then the values roll back as we get out of that dead-end while moving our investments into better values.

To the extent that this is true, our government is not helping. They're spending with abandon, but direction of the spending is either wildly shotgunned, or politically correct. With the decisions in the hands of the people and corporations making up the market (I think I can see you cringing as I say that), the processing of transitioning will in all likelihood be faster and much more efficient.