Depression Averted?

Please read:
http://www.cnbc.com/id/38443309

Apparently, economists now freely admit that we were facing a Depression. And, miraculously, the government saved us from this terrible fate.

I am not buying it. The stimulus measures taken by the Fed and the Treasury only postpone the inevitable while adding a massive drag to future economic growth in the form of a higher debt burden.

The idea that a Depression has been averted rests on the assumptions that housing has bottomed, the consumer has recovered, and the banks are solvent.

None of these things are true. At best, we are in for a 10-15 year Japanese style recession.

Corporate profits driving the recent run-up in share prices are mostly based on cost cutting, not revenue growth. This is not sustainable without increasing the pace of layoffs.

Aggregate demand has not recovered. It has been propped up with toothpicks.

Again, to fully understand the nature of the fall-off in aggregate demand we are seeing, one has to ask what was driving GDP in the 15 years preceding this recession. The answer is this: primarily credit growth and increasing debt levels. Now, of course there was real growth in there, of course there is a healthy base under our sick economy, but the PRIMARY driver of the growth was DEBT.

From the Prudent Bear (who has clearly done more research than I have):
http://prudentbear.com/index.php/household-sector-debt-of-gdp

So, buy your stocks (not really), celebrate the "recovery". Enjoy... because it won't last.