Good debts are going to fuel this recession

In recent days, there has been much talk about bank re-capitalization as though this is going to solve the credit crisis and lead the global economy out of recession.... what a load of nonsense.

The problem is that huge numbers of western consumers are so heavily indebted that they are not 'credit worthy' in a properly regulated financial environment. It is going to take them years to earn their way out of this situation. This is the real credit crunch.

These consumers will need to live within their means and still service the huge mountain of debt that they have built up in the last 10 years..... these are the good debts and the kind of people expected to fuel the retail economy with non existent disposable income..
It will be years before these consumers will (maybe never) consider 'releasing equity' in their homes in order to fund that new Porsche Cayenne that they so desire.....

Easy, unregulated credit by the banks fueled the asset bubble inflation that created the previous consumer boom. The provision of properly regulated credit (when it arrives) is not going to restore that boom. Society will be too busy working their tails off just to clear the mountain of debt that they are already committed to.