If it looks like the economy is doing poorly one way the government can try and

Sounds right and wrong at the same time lol

Lowering interest rates increase demand and spending by consumers but more important it increase the spending and investment by business because business spending falls much more than consumer spending during recessions.

I've answered that this way.

When the government decided that everyone deserved to own a home, even with bad credit, banks opened up the flood gates with loans.

When that much money was unleashed to buy homes, and the demand outstripped the normal supply, what do you think happened?

Demand increased prices. Inflation went crazy on houses.
Now, we see the result of , not just unemployment, but defaults.
So the bubble burst.

Now, what is our government trying to do?
Interest is already down to about 4% or so.
Prime rate, 0.25. 1/4 %
Government is trying to inflate the bubble again. Right?
Isn't that a large part of what caused this?
Insurance companies bought bad mortgages, banks, you name it.
The bubble has holes in it.

You can't fill a bucket with holes.