But they do. The US has one of the lowest savings rates in the world. And credit is readily available with many households maxing out their credit cards. If you reduce consumption significantly, you are going to reduce jobs which has a ripple effect throughtout the economy. If you have an unemployment rate of 25%, there will be a lot of people and businesses facing that fact. Do you think that you personally would be immune to the effects of a Depression?
Of course not. But I'm fairly young, and therefore am interested in long-term solutions rather than band-aids.
Excessive leverage is the poison in the world economy just as it is in the individual's balance sheet (and just as it was in 1929!), I see nothing in this plan which reduces the incentive to become overleveraged.
Especially when I hear the deadly dangerous talk about "supporting housing prices" which makes as much sense as trying to reinflate Yahoo to $200 a share.