A fundamental flaw in a lot of the economic debate over the last few years is that we have seemingly forgotten just how serious the situation was back in the fall of 2008. Many analysts I spoke to compared it with the "Great Depression," and believe it would have been just as dire if the Federal Reserve and Treasury did not  act as they did. And while many people -- me included -- have criticized the Troubled Asset Relief Program (TARP) and how it was executed that is not to say the situation wasn't dire. Nearly all of the major investment banks were insolvent because of the irresponsible use of leverage and creation of ill-designed and unregulated products.

What was necessary as a result was deleveraging. That by definition involves shrinking the economy. But in all the political and policy debates of the last few years, little attention is paid to the credit crisis that peaked in 2008. Every policy initiated since then is in some way a response to it.

I recently read a Chicago Tribune column by Victor Hanson where he criticized President Obama basically for hypocrisy because in 2006 Obama criticized President Bush's deficit spending. No where in the column did it mention the credit crisis. To compare the two records without noting the environments that they came in under; Bush with a budget surplus along with a minor economic downturn and Obama amid the biggest economic crisis since the Great Depression, is the epitome of a false equivalency. This is by no means a defense of any program or policy but any analysis that does not  take into consideration where we were in 2008 is flawed beyond repair. After all, the TARP bill comes under Obama's watch. The Administration deserves whatever  criticism is appropriate for how it handed the mess it inherited, but to ignore that mess is irresponsible.

Perhaps the problem is once a catastrophe is averted, people start to ask 'what was the big deal.'

Think about this. The Federal Reserve has committed to $85 billion in purchases as part of quantitative easing 3 because there is not enough organic demand for U.S. debt to keep interest rates low, which is essential to keeping this moderate recovery chugging along. It is an extraordinary step born of extraordinary pressures. The Fed is a victim of its own success in that we talk about all this matter of factly. Everyone needs to sit down and contemplate what they have done with all their special auctions facilities and quantitative easing; 1, 2, operation twist and open ended. The Fed Funds rate has been at zero for more than five years and the Fed is committed to keeping it there for another 18 months! That is unprecedented yet still was not enough to maintain a recovery so additional accommodation was needed in the form of multiple quantitative easing programs.

Political opponents of the Fed and the current Administration would have you believe that what began five years ago was just a run-of-the-mill recession. It was not. To put this in perspective, during the relatively mild recession of 1990-91 that arguably cost President George H.W. Bush reelection, the Fed Funds rate was lowered to 3%. (The rate was not lowered to 3% until September 1992, more than a year after we were technically out of the recession). That was the bottom, the accommodation level enacted to jump start economic growth. Before the current accommodative policy is over we are likely to spend more than a decade with interest rates under 3%.