Jeddy, the idea that "waste" of money is the cause of the recession is fallacious. As Keynes demonstrated (and the "New Deal" in the USA) government expenditure adds to economic activity. Thatcher showed us the converse, namely that taking money out of the economy reduces economic activity.

The recession's immediate cause was that borrower defaults on housing loans in effect took money out of the economic system, so that the function of banks to recycle savings into expenditure to fuel economic activity was impaired.

To go one stage further back, the unwise loan decisions were made for two reasons.

First, banks are regulated to have to hold reserves of a certain percentage of their book assets, precisely so that the probability of bank failure if too many savers want their money back at once is reduced. Creative accounting enabled the circumvention of those rules and the reation of "assets" in the form of derivatives that could as a result of small overall changes in economic conditions swing wildly in value - even to negative value.

Secondly, the remuneration structures in banks favoured employees who gambled in such derivatives over those who dealt with solid longer term investments, so the gambling bacame rife.

Both of those things were anabled by Reaganite and Thatcherite deregulation of banks and bank-like operations.

That deregulation also enabled the one-way removal of money from the host market (eg, in the case of UK banks, the UK) to foreign owners (say, in the case of HSBC, to Hong Kong and Shanghai) so creating a deflationary effect if not compensated by inward investment.