I've been getting some comments on various sites where my posts get reprinted that I'm too gloomy. Looking back over the last few, I have been a bit on the negative side, so here to even things out is Christine Romer explaining how we get out of all of our travails and proceed to the land of milk and honey.
Romer, in explaining how the economy will pull out of the recession, says a strong recovery is achievable even with consumers saving more. A short-run expansion in government spending, with the natural forces of inventory rebound and pent-up demand, will put the economy back on a normal track, she says.
And then the vision for beyond: “In a bubble-free economy, more of our output will take the form of things that raise productivity, rather than investment goods that turn out to be worthless and consumption goods,” Romer says. “Our saving will be higher, so that domestic investment will be financed more by domestic saving, with the result that the fraction of our output that is ours to keep will be greater than before. And, the reorientation of production to investments in the people, products, and energy of the future means we will be able to produce more with less pollution in the years to come.”
So the sun will come out tomorrow and all of this will just become a bad memory. Now, you pessimists out there, don't start jumping all over me, please.