There’s a near-consensus in DC that the recession calls for major government action. But on the libertarian fringe is what Politico calls “the Do Nothing Crowd.” This group tends to think there's no alternative to letting the economy, which became "filled with phantom wealth," contract, however painfully. “Our standard of living needs to come down to the point where it can be supported by organic output,” says an investment consultant.
It's a moral as well as economic argument: that borrowing more for a stimulus package will crush our kids: The libertarian Cato Institute is running ads pushing the line that we’re just burying future generations with debt. Besides, recession can have cleansing power, they say, weeding out weak companies like Circuit City, encouraging thrift, even improving health. Says the consultant, “It’s brutal, but it’s called capitalism, and it works. The alternative is called socialism, and it doesn’t work.”