Real reason for the global economic crisis

I sound like I am more knowledgeable than Paul Krugman, the 2008 Noble Prize laureate for economics. Actually, I just want to reproduce here the article written by Ross Gittins today in the Business Day section of The Age newspaper. I strongly believe that what he says is true:

"(Header of article) It's not inflation that's done us in after all; it's the long build-up in debt"

"For a decade the world's central bankers have been on the wrong tram, worrying about inflation when they should have been worrying about excessive borrowing."

" ... Turns out the inflation they should have been worried about was in the prices of assets such as houses and shares, not goods and services."

"Bubbles in asset markets require the ready availability of credit. And it's been the long build-up in debt on the balance sheets of household businesses (via the private equity craze) and financial institutions (hedge funds, investment banks and even commercial banks) that's at the heart of the global financial crisis and the recession that it's feeding."

"This is the point that is yet to sink in: recessions come not from excessive braking to control inflation, but from excessive borrowing and the bursting of asset bubbles."

Ross Gittins suggests that perhaps governments should set ceilings on the proportion of share and property values that can be borrowed against; i.e. control gearing ratio. Makes sense to me. Credit borrowing has simply got out of hand, leading to the banking crisis which the US recently fought to overcome by the injection of US$700bil into the system. (Note that it was just the "banking crisis" that has been dealt with; countries all over the world are still struggling with a looming "economic crisis".) As long as people borrow to spend, there will always be an asset bubble. The idea is to not let this asset bubble grow out of control again.

The prevailing wisdom is that governments should spend itself out of the economic crisis, even to the point of budget deficit. I believe this should be done by using available savings or domestic financing, so as not to feed the asset bubble again. The only real solution to the economic crisis is to allow house prices and share prices to fall to realistic levels, AND to have the POLITICAL WILL POWER to keep the asset bubble under control at all times.