Road to recovery

While it seems that the financial crisis has been averted and that America is on the road to recovery, there are indicators that suggest otherwise. Unemployment is still hovering around 9-10% even after a massive 1 trillion dollars of government expenditure (whose effect may be wearing off). Freddie Mae and Fannie Mac, the two government-sponsored enterprises that securitized subprime loans and hedged them in order to fulfill congress's desire to provide affordable housing, are still making losses despite the bailout. Investor confidence has been shaken by profligacy: Moody's warned that America's AAA debt rating will be downgraded if they are shown to be unable to manage their debt. 6 days later, the massive health care reform bill was passed that will cost $900 billion.(after numerous 'cost savings' that include $507 billion dollars in new taxes and penalties and $404 billion dollars in cost reductions). Recently companies like 3M and Caterpillar have felt begun to feel the impact and have reduced their earnings estimates. Long-term predictions of the economy or stock market are notoriously inaccurate, but it seems that for the moment the current administration is unwilling to address the core problems of the economy.