The FED--savior or magician?

[Fishhead24]

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My thoughts on the subject recently:

If the money supply shrinks, which I assume would happen if the housing market crashes. The loans speculators bought real estate with created a ton of money inflating the money supply and the dollar goes down. Everybody thought they were gonna get rich and spent their money helping the economy. As these loans go in to default the money supply will sharply fall unless the government comes up with something to create and thus spend a lot money on (like a social program or a war). I speculate that something big will have to change, I am thinking a steep recession. I do think the OP does have a point, if the government runs out of things to motivate people to spend on, there will be an inevitable crash.

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Your a very intelligent individual.