Will the economic crisis turn worse?

No we are not into doomsday analysis ? We are just giving a point of view with historical evidence that despite Prez Obama's sincere & continuous efforts to stem the economic crisis it could just get worse due to the steps that the Fed & Treasury have taken recently.
We could be wrong.
Tell us if we are & why? We encourage diverse opininon
even if it is from commercially interested groups opposed to our thinking.

In the Chapter " Anatomy of Crisis" of the Great Depression, Milton Freidman in his popular best seller " Free to Choose " clearly says that during the 1929-34 period
" the Keynesian revolution not only captured economics profession, but also provided an appealing justification and a prescription for government intervention.
The shift in opinion of both the public and the economics profession resulted from a misunderstanding of what had actually happened. We now know, as few knew then , that the depression was not produced by a failure of private enterprise , but rather a failure of government in an area where the government had from the first been assigned responsibility ---- To coin money, regulate the Value thereof and of foreign coin"

Freidman goes on to say in the Book that wrong government intervention & "subsidising the inefficient policy" propped up "The Knickerbockers Trust company" and many banks in 1907 creating a Federal Reserve system that created arbitrary rules on restriction on withdrawal of deposits , that collapsed ultimately in 1929 to create a much greater and long drawn depression.

The present day crisis has roots similar to the great depression.
Once again it is probably the government intervention & "subsidising the undeserving policy " policy that is precipitating the crisis. By propping up the security & mortgage arms of monolithic banks & insurers such as Citi & AIG it is putting pressure on the already distressed citizen tax payer. If Banking or Insurance operations and derivatives business are segregated the problem will largely dissapear from the core functions of these companies which could go about the daily business normally. The derivatives business then must be examined closely, one large part of which would be the subprime mortgages that have been securitized. This part must be either
dis entangled and scrutinized or written off en block. It is illiogical to repeatedly try and sell these toxic mortgages as securities in the market knowing that they would mutate and collapse in future under the weight of their toxicity.
The US Governments , the Fed & the Treasury's persistance with the disposal of the sub prime housing mortgages first by securitization and now by the public private partnership is simply baffling and shall only prolong and deepen the crisis, by the next quarter.

This is our opinion
We could be wrong. Tell us if we are & why? We encourage diverse opininon
even if it is from commercially interested groups opposed to our thinking.