The era of small government is dead.
Either we once again invest in our future, notably through an expanded public sector, or we will lose our future.
The immediate need is to save the financial system through ample liquidity from the Federal Reserve, government backing of the commercial-paper market, and banking sector recapitalization, mainly by private money but also from public funds as needed.
Yet the greater challenge is not simply to stop a collapse, and certainly not to resurrect the housing bubble, an impossible and misguided goal that is still widely espoused through one scheme or another to get mortgages flowing again.
