What kind of "recovery?"

Per Fareed Zakaria

My problem with the entire bill and the approach of both parties is that it seems to basically to try to reignite the consumption bubble that has fueled the American economy for a while now, but that, we know, is fundamentally unsustainable.

CNN: Why is it unsustainable?

Zakaria: Well, if you look at what has been fueling the American economy for the last decade or more, it has been a rise in consumption. American consumers have started spending more and more, going from 62% of GDP to 70% of GDP in consumer spending.

The problem is that this is not happening because of any rise in our incomes; it's because we are taking out loans, we are borrowing, and it is this expansion of credit that was at the heart of the financial crisis. Now, the solution of both parties is to try in a sense to get that old machine going again. If you look at the tax cuts, if you look at all of these government stimulus measures and if you look at the Federal Reserve pumping money into the economy, the whole effort seems to get people to spend more, to borrow more, but the reality is that's not a sustainable strategy.

In the long run, what we actually have to be doing is allowing people to get their balance sheets in order, borrow less and move the economy more dramatically toward a focus on investment and the creation of products of various kinds, rather than hoping that if we all just started spending more, borrowing more, perhaps selling each other our houses once again, the American economy would be back on track.

via www.cnn.com

Sounds about right to me.