Because the "cure" threatens to kill the patient. The current recession is deflationary - something we have not seen in the US since the Great Depression. Whereas monetary policy can rather easily counteract a typical recession - and be used to bring a recession on as in 1982 to "cure" the economy of persistent inflation - in a deflationary environment monetary policy has little or no traction. And today, without fiscal stimulus, we could realistically find ourselves in a deflationary spiral. Businesses and assets that are otherwise sound can get pushed down in a vicious circle of deleveraging and shrinking demand resulting from lower prices and lower wages.

This has already begun. We've effectively seen a run on the shadow banking system of investment banks, prime brokers, hedge funds, etc., as initial losses in subprime have forced firesales of other assets to meet margin calls. To be sure, the credit bubble extended far beyond subprime, and the deteriorating economic fundamentals support continuing write-downs and losses on Alt-As, option ARMs, prime mortgages, auto loans, credit card debt, student loans, etc. But the credit market's subsequent freezing has put everyone at risk, so that the recession could potentially far overshoot the "disease" of over-indebtedness and overconsumption. Absent the government stepping in and trying to make use of the wasted capacity in the economy, making up for lost private and business investment, this process could spiral on well beyond what the economic fundamentals justify, and past anyone's ability to predict as well.

Yes, this recession is the result of previous bad choices, but that doesn't mean we shouldn't try to ameliorate the worst consequences and prevent a negative feedback loop. Telling people that this is the "cure" without trying to end the cycle of loss smacks of neo-Hooverism.