Stimulating the Economy

All the usual procedures taken to stimulate the economy just doesn't seem to be working. The Fed cut the funds rate to a range between 0.0% - 0.25% from 1%, the lowest it has ever been. Our government recently voted on a $700 billion package to avoid the collapse of the financial system. We have seen a couple stimulus packages and numerous tax breaks. This is supposed to have helped our economy right?

Time is what we need right now. Obviously it will take time for the economy to sort itself out. I think the bailout package is what will get us out of this but it will take several more months to take affect. We have to be patient. Plus the Fed has also pledged to further assist by buying mortgage backed securities and possibly purchasing open sales to further inflate the money supply. Fundamentally, low interest rates spur on the risk of inflation. However, we are currently experiencing a time of deflation (to be blogged about soon). So lower interest rates pose low risk and force the consumer to borrow money and spend. Should this not stimulate the economy? Consumer confidence is at a low, unemployment is the highest it has been in 15 years (6.7%), and the economy had its largest contraction in 7 years (0.3%). We have all time interest rate lows, pledged assistance for homeowners, and other stimulus plans. The government's policies and actions have what is called, an outside lag. This is the time is takes for that policy to start working. I do not believe we have given these things enough time to work and have an effect on the economy. This is the greatest country on earth. Just be patient and allow our leaders and their policies to have an effect and turn around this economy.