September 24, 2009
– Comments (7)
The best use of a second stimulus
I'm trying to eat lunch here...
Unfortuntately, a second stimulus could very well be necessary if authorities want to continue staving off deflation. The near-term risks to the economy remain overwhelmingly to the downside. Relative to GDP, China's stimulus package is larger than that of the US, for example.
It's the headline I object to.
My answer is that the country needs (no, not a good 5-cent cigar) a clearly articulated national growth strategy
Is that anything like a soviet 5 year plan?
P.S. It's the "stimulus" I object to...
Jubak argues for a second stimulus targeted towards infrastructure.
If the administration and our congress critters didn't put most of the current stimulus package towards infrastructure (like they said they were going to do), I wonder what makes him think they'd do anything different with a second stimulus?
America needs another stimulus like it needs to another $2,000,000,000 loan to pay interest on.
When will people start to get it: we cannot continue to live this way!
Is a major deflation the better way to go?
If you read Dan Ariely
He talks about when he was a burn victim. The common wisdom was that the bandages should be removed quickly to minimize pain. He did studies and found that removing the bandages slowly with a lower level of pain for a much longer time created far less trauma for patients.
I think that's where the economy is. The damage is done. The credit bubble burst and history shows there is just no simple, quick solution. Let everything crash and pick up the pieces is just not going to happen. So, they are trying to pull the bandages off slowly, hoping the trauma will be minimized.
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