Bryce's suggestion isnt' too far from the fundamentals of macroeconomics. He's basically espousing a Keynsian solution, and he may be right about it.

One of several situations the confounds a recession/depression is a liquidity crunch. This occurs when lending and financing activities slow (or cease), and capital isn't available for investment. As the world never seems to learn, this isn't a static system, it's a dynamic one, and the problem is that less money for investment means fewer means of production means less employment (at lower pay) means lower consumption.... You get the picture. Downward spiral. For a good example, look at Japan since 1990.

One way of increasing the money supply is to relax lending conditions. This is what happens when the Federal Reserve Bank lowers its lending rate (essentially, the short-term emergency lending rate to banks). This reduces commercial bank interest rates, and makes it easier to get a loan. This is known as monetary policy -- it directly regulates the amount of money in circulation -- and was championed by Milton Freidman of the Chicago School (University of Chicago's economics department).

Another way is to increase Federal spending. This can be done by printing money, but more ususually (and sanely) is to increase Federal borrowing. The money is spent directly through Federal appropriations on specified budget items. This is known as fiscal policy -- it's concerned with government fiscal (spending) policy -- and was championed by John Maynard Keynes.

Each tool has its plusses and minuses. Monetary policy can be enacted very quickly (say, within a weeks' notice), and tends to have impacts in fairly short order. However it requires room to move -- with interest rates now at near all-time lows, there's little room to exercise additional rate cuts without introducing negative interest rates. That's possible (and even has a real meaning), but would be foreign to many people. Monetary policy is also indirect and non-targeted. You're making it easier to spend money, but without specifying where that money should be spent.

Fiscal policy takes far longer to enact -- it requires a federal budgetary cycle, partisan bickering, and then actual expenditure by departments. An argument against the tax cuts enacted by Congress last summer was that they wouldn't actually start having an impact on the economy for another year (which would ba about now). Fiscal policy makes more sense in an extended downturn. Fiscal policy does have the advantage that it can be specifically targetted at economic sectors or regions. With wisdom, these are based on real impacts and not merely political expedience.

Simply printing more money can also be done. It's something of a mix of both alternatives There is an inflation risk, but inflation is at historic lows. As a strategy to combat low levels of investment, this may be a useful strategy. But there are other structural problems of greater concern -- trust and demographics (aging Boomers) being chief among them.

[Edits: There are no speling errers in this document. I steak my name on it. Krastne Slef.]

...in the sense I'm referring to means the followers of a specific doctrine. In this sense, [link|http://cepa.newschool.edu/het/schools/chicago.htm|the Chicago School of Economics] refers to the conservative fiscal policy doctrines which arose from the faculty at Hyde Park in Chicago. While several may be elsewhere (or dead) and peforming the most societally useful work, the school of thought continues to be known by this name, though some say [link|http://www.huppi.com/kangaroo/L-chimain.htm|it's lost much of its former standing].

Next time, just grab a 2x4...no, make that a 4-by, and whomp me upside the head for a few hours. Then see if you can find a part of me that might actually be damaged by such treatment.

Can't believe you had to point that out to me twice before I saw it....