Current government policy appears to be steering a mid-course of possible options.
Anna Friedman, and no doubt Milton Friedman were we still burdened with him, is calling for far greater government spending along with Paul Krugman based on the Monetarist idea of maintaining a stable money supply. In my estimation, in this direction lies the endless depression experience of post-1990 Japan.
After all, the purpose of an economic depression is to reduce the excessive debt to income ratio which has been created since 1980. If the government had merely back-stopped the FDIC and allowed the banking system to fail I would have been personally content as asset prices plunged by 90% or more. But Americans are not likely to be as content with the advice of a prior Treasury Secretary as they were more than 100 years ago when he advised that Americans should sit under their own fig tree and vine until the depression passes.
Instead, we have seen a great emphasis on maintaining the functioning of the banking system, continued funding at a reduced level for state and local governments, and a grab bag of public spending projects designed to maintain a certain minimum level of aggregate demand. Essentially a middle course of government spending between the sudden collapse of the "fig tree and vine" advice and the full-replacement of lost consumer/business spending recommended by the Monetarists.
It reminds me of a Pogo cartoon I read one Sunday when I was a child. A bulldog, drawn like J. Edgar Hoover, was showing Pogo around his training camp for frog agents. One frog trainee was using a stick to beat a canvas bag which had two lumps of coal for eyes. The frog instructor reprimanded him, "Don't beat the prisoner like that!"
"Beat him like this, it's more humane." Where upon the instructor greatly increased the speed and action of the strokes. "Ulp, more humane?", said Pogo. "Yes", said the J. Edgar Hoover character, "This way it's over quicker."
So you're left with a philosophical debate, is it more humane to have:
1.) a five year economic depression with 30% unemployment, or;
2.) a ten year economic depression with 15% unemployment, or;
3.) a multi-decade malaise in the style of Japan?
I suspect many think they can choose option number 2 and not have it last ten years, but I suspect most understand the cost of the lower unemployment rate even if they don't big note it. In any event, it will be interesting to see how this turns out over the coming years.
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