What Does Another Interest Reduction Really Mean?

I'm no financial expert, but it would appear, those in charge, are not either. Now that banks have decided to not lend money to everyone that walks through the door, and not give credit cards to every person that wants to be in debt, the Feds drop the interest rate to 0%-0.25%. This is the tenth significant drop in just a little over a year, but keep in mind, according to our leaders, the economy was strong in July!!! Now that the truth is out, it is simply casual information to refer to the recession that began last December. So, basically we have three factors to consider. One, the government and the banks are pretty sure, we the people, do not know diddly-squat! That's right, they think we only know what "they" tell us. So, for months and months, they told us every things was fine and strong as we shook our heads and clambered for some sort of financial stability. When it finally became apparent that we were onto the real deal, they admitted the problem and dropped the gasoline prices. What a bonus in the deal. Thousands of Americans have no place to live, their vehicles have been repossessed, but hey, gasoline is cheaper than it's been in 5 years. Second, we are now being encouraged to spend. In case we haven't noticed, we are a nation of consumers and perpetual motion is the basis for our economy, so if people don't spend, our economy will completely collapse, if it hasn't already. That's something that just keeps resurfacing in the back of my mind. As "they" tell us all the tools they still have in their bag of tricks to avoid a severe financial collapse, I can't help but think it's already severe. And either this has come as a complete surprise to them, thus total incompetence, or it's just that much more smoke and mirrors to distract our attention from the inevitable; thus total deception. Either way, doesn't eliminate the fact that this is severe, as we are now reading headline comparisons to the 1930's. If it's taken them a year to admit a recession, how long will we be in a depression before "they" tell us? The third and final factor in this has really got me stumped. With the banks stiffening their lending qualifications and more people facing foreclosure, repossession, and unemployment, the only people that the reduced interest rate will truly affect, are those saving, or trying to. The banks aren't dealing with borrowers, and not making any money off of foreclosures and repossessions, so what happens when the savers, the money marketeers, and the CD holders quit doing business? Will that really strengthen the economy? When the person of average or middle income has no reason to deal with banks, which is where this is headed, what then?
Wilt thou set thine eyes upon that which is not? for riches certainly make themselves wings; they fly away as an eagle toward heaven. a Proverb of Holy Scripture