When will the Recession End?

This is a much debated topic in which many Economists can battle it out for long amounts of time. Some believe that it will be all over by Mid-2009, some by the end of 2009, others think it will be an extended recession that won't end until past 2010. The question is who really knows? No one. One the recession will not be over until all Financial Institutions are put back into normal day by day operations. Personally I believe it still is far too early for anyone to predict when these turbulent times will end. The key is to see if the Obama Administrations initiatives end up being effect policy change. A resurgence in the housing market is a critical process and that relies on the banks effectiveness to begin lending. Currently wit the LIBOR dropping consistently in the past three months it looks as if interest rates will continue to depreciate making banks less willing to lend money. Credit strains continue however we have seen the overall markets strengthen overtime. The Obama administration's large stimulus package should add to aggregate demand in a timely way, complementing aggressive, often unprecedented, action from the Fed. It still is too early however to make any time table as of when the plan will work. I have many worries about the potential for near-term deflation or longer-term high inflation could not be dismissed out of hand but had self-correction mechanisms. Currently we are withdrawing excess liquidity in response to the Financial Crisis. One key aspect in which I believe we are failing the economy on is the constant bailouts and the unwillingness to apply personal responsibilities to companies failures. An ending quote from the British MEP applies perfectly to current times. "It’s that you’re carrying on willfully worsening our situation, wantonly spending what little we have left. You cannot carry on forever squeezing the productive bit of the economy in order to fund an unprecedented engorgement of the unproductive bit. You cannot spend your way out of recession or borrow your way out of debt."