Comments | the_recession: The Case For Another Stimulus

cieldumort in the_recession

The Case For Another Stimulus

Jun 06, 2009 15:49

There are really several arguments pro and con. There are also the faux cons (arguably put forth by faux cons, no less) such as this gem: GOP: where are those 3.5 million jobs Obama promised (PDF), inspiring some interesting retorts - Wall Street Journal RTE Blog & Krugman, just two examples.

But, by and large, the pro and con debates both have ( Read more... )

recoveries, stimulus bill, stress test, the |_____ club, martin feldstein, cepr

Comments 7

volksjager June 6 2009, 22:17:21 UTC

Except that the Chinese have indicated they won't buy anymore of Amerca's bad debt.

cieldumort June 6 2009, 22:29:36 UTC

Just a tiny dilemma

volksjager June 6 2009, 22:59:03 UTC

Where do you see the money coming from then ?

cieldumort June 7 2009, 00:04:44 UTC

It's still in China's best interest to keep on buying up our treasuries. Their own recovery is on thin ice, at best, if not a complete sham, and as a net exporter nation like we were in the 30s, they would be very loathe to pull the rug out of the US consumer, quite yet.

theheretic June 7 2009, 16:37:33 UTC

Every little bit I get from govt, I put towards govt. Every extra bit I get, isn't spent on junk. It goes towards debt. My grandparents told horror stories of Debt-Deflation Trap, only they didn't know that's what it was called. As a citizen, my best survival lies in being debt free, NOT having "more stuff". So these stimulus packages will just pay all other citizens to pay down debt. Even the dumb ones have caught on. So of course stimulus will fail. The best they can do is employ more people, but if the goods aren't sold to someone it doesn't matter and the stimulus will fail. And if taxes are too high, or suspected they will be, that's yet another reason to save money to pay off debt, this to the govt for stimulating the economy so someone else gets rich.

cieldumort June 7 2009, 18:28:11 UTC

Yeah, in many ways, we are already in a debt deflation spiral... with caveats. (One of those definitely being that governments around the world were much better-informed, and acted much more quickly and concertedly, than had ever been the case in the early 30s).

On the other hand, the world in the early 30s wasn't leveraged as it is today. Also, back then there wasn't exactly this tiny, little problem called peak oil. Interesting to have that kind of inflation still going on during a massive deleveraging.

Elephants in the Room jimmywitz June 7 2009, 19:25:33 UTC

It amazes me that economists will make prognostications and opinions without even discussing the several large elephants in the room ( ... )