Hence, calls for a resurrection and expansion of the New Deal

Zero Hedge shrewdly refers to our present “dust bowl economy”:

In our economy, debt is the marginal field that has been plowed up for brief exploitation and profit. In response to the drought of income and collateral that supports debt, the Federal Reserve, Congress and the Obama administration have actively made the crisis worse by doing more of what failed spectacularly: encouraging more debt with zero-interest rate policy (ZIRP), massive "socialized" subsidies of housing and mortgages, and so on.

Just as in the dust bowl years, the occasional rain raises hopes of complete reversal. In our dust bowl economy, every "green shoot" of debt expansion, consumer confidence, builder confidence, retail sales, etc. is taken as "proof" that the "recovery" is "gaining steam" and the economy has fully reversed course from contraction to expansion.

Then a few months later the "green shoots" whither because the fundamentals that enable more debt--household income and asset collateral--are both deteriorating. Income is down 8% from 2007, and median household net worth fell 38% from 2007 to 2010.

Read the whole post. The only things missing now are the Works Progress Administration and the Civilian Conservation Corps.

Update: More in the same vein from Amity Shlaes.