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Whitney: U.S. Out of Ways to Boost Economy

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December 09, 2009 – Comments (5)

Meredith Whitney feels pessimistic about the economy and financial system, because the government has run out of ways to provide support.

“The government has played such a ... central role in the capital markets this whole year. You’ve really had to bob and weave around what they’ve been doing,” she told CNBC.

The government has kept credit markets afloat by supporting the housing market, buying agency paper etc., Whitney said. “I think they're out of bullets."

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5 Comments – Post Your Own

#1) On December 09, 2009 at 2:10 PM, EnigmaDude (93.08) wrote:

Reload - Guess she had not heard about the new "Cash for Caulkers" program yet...

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#2) On December 09, 2009 at 3:05 PM, Melaschasm (55.44) wrote:

Whitney sounds like the leaders of Japan during the lost decade.

We cut interest rates to zero, but the economy did not improve.

We increased spending and debt but the economy did not improve.

We increased spending and taxes, but the economy did not improve.

We increased spending, debt, and taxes, but the economy did not improve.

 We tried all of those things a few more times, but the economy did not improve.

Now we are out of ideas to stimulate the economy, so we will keep doing all of the above.

Do you think that the US and Japan are doomed to stagnation, or is there some other way to stimulate the economoy, which has not been tried?

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#3) On December 10, 2009 at 11:20 AM, outoffocus (22.82) wrote:

Do you think that the US and Japan are doomed to stagnation, or is there some other way to stimulate the economoy, which has not been tried?

Yea, let the economy correct itself. Then capital can be moved out of the nonproductive areas of the economy to more productive areas and asset prices reflect their true market value rather than their manipulated value.

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#4) On December 10, 2009 at 11:27 AM, catoismymotor (46.33) wrote:

Lower taxes for everyone and forget the Socialist agenda. Those two things would help.

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#5) On December 10, 2009 at 12:27 PM, Melaschasm (55.44) wrote:

Excellent answers, and both plans would likely be a better solution than what the governments are actually doing.

Unfortunately when I gave only cato's answer but both answers in an economics class back in 2000, my grade was good, but not excellent.

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