4. Programs like CfC and the stimulus package are the solution to this crisis, as time is bearing out.
I'm sorry, but you sound like a true-believer Keynesian. As such I believe you are seriously misguided about programs like CfC; let me try and demonstrate, as simply as possible, why this sort of program produces nothing but a short-term gain that I believe actually makes the economy weaker in the long run.
Let's take a community where there are 10,000 people projected to buy new cars over the next 4 years, or about 2,500 cars per year. So the car dealerships and factories should be supplying 2,500 cars/year to meet the demand. X number of people work in the factories, Y in the dealerships, everything's reasonably balanced out.
Now the government steps in. 2,500 cars/year isn't good enough. $4500 (of state-borrowed money) for everyone who buys a new car this year, says Big Nanny State! 8,000 people rush to take advantage of the "free" money. The car factories and dealerships scale up to meet this new demand. More people working at the factories and dealerships! More cars sold! Record profits! New cars in every yard! Tax revenues up on all the work and sales! What a success! In year 1.
Now year 2 comes along. There are only 2,000 people left in the community who need a new car. Only about 700 will actually buy a car this year. But the factories & dealerships are all built up to supply 8,000. Now what happens? Supply greatly exceeds demand. The factories and dealerships lay people off. Some close outright. Sales plummet; we're talking a 90% year-over-year decline here! People out of work. Tax revenues crater. But that money the government borrowed to finance the program still needs to be paid back -- with interest. Kind of hard to do that now...
I don't consider myself a hard-core Austrian, but it makes way more sense to me than any of this Keynesian nonsense.
As for the overall consumer debt load, there's actually a chart on the Market Ticker blog I linked that shows its total amount. It is over 2.5 trillion dollars. How much has been paid back? About 50 billion. That's a drop in the bucket compared to what's out there. Hence why I say, getting that number down to something sustainable is going to take a long time, and it does not help in the least that just as the consumer is finally starting to de-leverage, the government is levering up at warp speed and playing "kick the can" with all the big banks, just like Japan did through the 90s.
One really gets the feeling the whole thing is a powder keg, just waiting for the spark to be lit.