One reason the latest bailout plan hasn't worked yet? Banks have finally decided (temporarily) not to lend money to folks that can't pay them back. That would be US consumers--the customers who account for 70% of the spending in the economy.

Asha Bangalore of Northern Trust explains:

September Retail Sales Awful:

All major components of retail sales posted a drop in sales during September, with the exception

of a 0.1% increase in gasoline and a 0.4% gain in the health and personal care component.

Consumer Spending Will Decline In Q3 For First Time Since 1991

As Houses, Stocks Plummet, Consumers Getting Poorer At Astounding Rate:

The decline in net worth in the third quarter will mark the fourth consecutive quarterly reduction. It is worth noting that during the three quarters ended in June 2008, household net worth has fallen $2.69 trillion compared with a $3.19 trillion decline in net worth during the 2000-2002 period. In other words, the latest three-quarter drop in net worth is a staggering 85% of the reduction in net worth which occurred over a three year period.

Consumer Debt Still At Record Levels:

Consumer Saving Minimal:

Not pretty pictures. As Asha observes, at a minimum, it will take several quarters for this situation to work itself out and for the economy to begin growing again. And it's hard to imagine banks rushing to lend all that new capital the US taxpayers will soon be handing them until the US taxpayers' personal balance sheets are in better shape.

See Also:

Sorry, Hank, New Bailout Not Working Either

Julian Robertson: 80% of US Consumers Broke, Crappy Economy For 10 Years