Thowing out the old codebase is exactly the correct solution. It's also the most politically unpalatable, which is why it won't happen while the politicals sti

Thowing out the old codebase is exactly the correct solution. It's also the most politically unpalatable, which is why it won't happen while the politicals still have some control. Depressions and Recessions are not allowed to happen anymore. They are actually healthier for an economy, as the bad debts get written off, lending practices get rewritten, consumers and companies learn the dangerous side of debt. Like a forest needs fire, economies need blow off periods where the bad decisions and investments get cleared off. By shifting private losses to the public balance sheet, and producing shifty numbers which don't say 'depression', politicans dance around like project managers and keep the old codebase going. But, as we all now, you eventually have to toss it all in the bin and get going again. The negatives, of course, is that people will lose jobs, homes and all that goes with it. The positives is that once you're bankrupt, you can't get any more bankrupt and can work your way back - this applies to companies and individuals. Old industries and practices die, and new ones rise up to take their place. It's the placing of old industries on life support that kill the economy in the long run. Keeping GM on life support through public money diverts that money away from worthwhile investments (either public or private) and keeps subsidising a smaller group of people at the expense of society at large. The damage is already done, and the chips need to lay where they fall. Papering over the cracks with phony statistics and bailout after bailout will eventually fail with the same result, but it will take much longer to happen, and much longer to recover. The irony in all this is that the only avenue left for governments (and being actively pursued) is inflation. Money printing through quantitative easing is going ahead in big numbers. Eventually all this fake new money will be lent out under fractional reserve by banks, and inflation will roar ahead. The only people left standing after that will be the ones with real assets (housing, factories and machinery, farmland) bought with debt denominated in 2010 dollars. People will turn off debt and onto saving just as savings become decimated by inflation. The smart thing right now is to buy real, worthwhile assets with locked-in low interest rates and just ride out the deflationary period until the inflation spark catches in the tinder-dry monetary world. It's quite likely that another stagflationary period will be with us in the next 10 years. If you don't believe inflation will happen just tell me which paper currency is older than 150 years. All paper currencies eventually reach their intrinsic value - which is nothing. It's just the timeframe that varies.