I think it is too soon for the federal government to stop injecting liquidity into the system considering many state governments remain in pretty desperate shape. I am not sure whether or not state governments simply failed to initiate new policies or whether they did not have enough time, but the fact remains that most budgets are still caught up with deepening deficits and with few ways of producing the necessary funds to pay off the debt. If anything the stimulus plan allowed local governments to essentially stay buoyant, it did not allow for any legitimate organic growth as batman indicates. And, because the recovery occurred without any significant job growth I fear that more jobs will be lost now that the stimulus is over and deficits still loom.
Coupling that with the housing prices close to double dip as you indicate, I do not feel very bullish about the continuation of this recovery. I like to think back to the great depression and the kinds of policies Roosevelt initiated during his administration, and would be curious to know how much was spent by the government in Roosevelt’s time proportionally to what has been spent by the Obama administration. I don’t think the federal government has created enough jobs this time around as I remember the widespread public works projects initiated during the 30s. There has been some initiation of this kind, however not enough. Most of the American infrastructure remains in dire condition and I believed this crisis and recession would be the spark to begin a long overdue ‘rebuilding of the nation’ kind of public policy, which would put money back into the hands of the average american, enabling him to increase consumption or reinvestment into the economy and thereby producing organic growth. But, because there is evidently no more money to go around, this faint dream looks as far as ever from materializing. So over all, I am a double dip advocate. I do not believe enough fundamental growth has been accomplished or enough financial reform implemented for the American economy to survive positively on its own without federal aid.