Comments on: Government Stimulus Programs Not Always the Hoped-For Panacea

By: Three Ways to Profit as Inflationary Fears Push Gold Over the $1,000 Mark

Three Ways to Profit as Inflationary Fears Push Gold Over the $1,000 Mark — Tue, 07 Apr 2009 18:23:37 +0000

[...] basic logic – which Money Morning's Martin Hutchinson outlined as far back as November – is that with the government pumping so much money into the economy, there's bound to be an [...]

By: Fed Announces $800 Billion in Homeowner, Consumer and Small Business Aid

Fed Announces $800 Billion in Homeowner, Consumer and Small Business Aid — Wed, 01 Apr 2009 16:34:00 +0000

[...] a full report on the effectiveness of stimulus packages, check out this related Money Morning report by Contributing Editor Martin Hutchinson that appears elsewhere in today’s [...]

By: Two Ways to Protect Yourself When the Inflation Alarms Return

Two Ways to Protect Yourself When the Inflation Alarms Return — Thu, 12 Mar 2009 14:45:42 +0000

[...] basic logic – which Money Morning's Martin Hutchinson outlined as far back as November – is that with the government pumping so much money into the economy, it's bound to have an [...]

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Mon, 01 Dec 2008 07:44:44 +0000

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Thu, 27 Nov 2008 12:55:03 +0000

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By: Government Stimulus Programs Not Always the Hoped-For Panacea | Business News

Thu, 27 Nov 2008 02:44:01 +0000

[...] Government stimulus packages are all the rage, but do they really help? And what impact will excessive spending have on the future? Read the rest of this great post here [...]

By: Government Stimulus Programs Not Always the Hoped-For Panacea | fixedinvest.com

Thu, 27 Nov 2008 02:24:45 +0000

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Thu, 27 Nov 2008 02:16:36 +0000

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By: Government Stimulus Programs Not Always the Hoped-For Panacea

Government Stimulus Programs Not Always the Hoped-For Panacea — Thu, 27 Nov 2008 01:47:15 +0000

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By: US Election On Best Political Blogs » Blog Archive » Government Stimulus Programs Not Always the Hoped-For Panacea

Thu, 27 Nov 2008 01:15:56 +0000

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Thu, 27 Nov 2008 01:06:04 +0000

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Thu, 27 Nov 2008 00:21:55 +0000

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By: Colin

Colin — Wed, 26 Nov 2008 22:31:51 +0000

Sure the money has to come from somewhere and will put extra pressure on the money supply, possibly curtailing private sector spending but I think you're missing the point, the reason why we are in recession is because private sector spending has been curtailed. No-one is buying ANYTHING! In Australia we aren't getting someone to dig a hole to fill it in we are spending it on infrastructure which in difficult times is less expensive than when the economy is booming. Too much of that article sounded like Republican party scaremongering. The election's over. Fear doesn't work anymore.

By: Interest Rates » Government Stimulus Programs Not Always the Hoped-For Panacea

Wed, 26 Nov 2008 21:06:35 +0000

[...] Read the rest of this great post here [...]

By: Omar

Omar — Wed, 26 Nov 2008 20:00:11 +0000

I hope will larn more from u
thanks.

By: Mary Diane Dolan

Mary Diane Dolan — Wed, 26 Nov 2008 18:55:31 +0000

The comment of K made me laugh and laugh. A friend of mine just dies, K. What is "the solution"? A war breaks out, impoverishing and damaging thousands. What is "the solution"? What ought the government to do? REMEMBER that, according to yourself, you cannot recognize or reveal any negative or unfortunate situation without also revealing "the solution." As for the present topic, I cannot understand why, if deficits don't matter, anyone should even KEEP TRACK OF what the US current accounts deficit IS. I cannot understand why such terms as "improvement" or "worsening" should be applied to deficit, if deficit is a meaningless figure. Also, someone mentioned that the money the US gov't has borrowed has come largely from persons and entities living within USA. Why does it matter where creditors live or what their nationality is? Also, if I have lent money to USA & now hold US Treasurys, what is meant by the assertion that I have "counter-balancing assets"? What is meant by "counter-balancing assets" and why should it be assumed that I have any?

By: Government Stimulus Programs Not Always the Hoped-For Panacea | kozmom

Government Stimulus Programs Not Always the Hoped-For Panacea | kozmom — Wed, 26 Nov 2008 18:38:23 +0000

[...] details: Government Stimulus Programs Not Always the Hoped-For Panacea [...]

By: Web Smith

Web Smith — Wed, 26 Nov 2008 17:50:27 +0000

Anything that puts money, not credit, in the hands of the people will provide temporary relief. FDR's program, at a time when the banks had raised the interest rates and caused the depression, did this and the relief lasted for the 70 years that it took for the government and the banks to strip the population of its wealth again.

When too much of the population's income goes towards paying interest, the money moves directly to the banks not remaining in circulation and generating commerce. As long as population is enticed to not live within its means, this will be a repetitive process. The population generates over 70% of the economy and throwing money t banks will have no effect until they have someone to loan the money to. When the population once again has money and the banks start releasing the cash that they were given, inflation will hit and slow the recovery.

http://ewebsmith.com/Finance/BankBailOut.html

By: John Lounsbury

John Lounsbury — Wed, 26 Nov 2008 15:57:47 +0000

Great analysis. I was interested in the surprisingly benign, even hopeful, outlook. Your implication is that Obama's stimulus "spending" has an opportunity to be "investment". I agree that it is possible that could happen. However, the effects on the economy will be slowly realized and will take years, not months (or even quarters). This will result in the consumption, not generation, of political capital in the next few years. Can this new "great communicator" keep the American citizenry on board if such a program is underway but not paying substantial dividends for more than the four years of his first term? If not, he might "do the right thing" and not get re-elected.

By: Christos

Christos — Wed, 26 Nov 2008 14:16:19 +0000

The economic policy of G Bush made the same ,the opossite way ,instead of increasing expenses they reduced the taxes .The markets where happy despite the deficits .
Finally the judgment of what is good or bad for the economy seems to be subject of who is the beneficiary of the stimulus and not the real needs of the economy strength .

Christos

By: Robert McDowell

Robert McDowell — Wed, 26 Nov 2008 14:10:27 +0000

I read your essays because they are interesting by being forthright and strongly opinionated. I do not always agree, however. For example, why focus so strongly on Federal Debt when nearly half of it is not external to Government but internal. The remaining $6 trillion that is owing to private investors, including one third to banks, equates to less than hal of US household debt, less than half of US corporate debt and a fifth of US finance sector debt. All have to greater or lesser degrees counter-balancing assets. US Government bail-outs are stepping into the breach to restore confidence and allow the link-up between all these to function sensibly – and Government is doing so profitably for taxpayers all-round. Of course, deficit-spending makes less sense and may inflate rather than manage down asset bubbles if not judged cyclically. Why not try more balance across all the stocks and flows of business, households, banks and government assets and debts and then ask the question when Government squeezed or expanded its financial bellows at the right and wrong times, and whether a mistake was to accept household and corporate debt grow at much faster rates than government debt thereby financing the $trillion trade deficit? And then you have to ask whether the US easy credit economy that worsened the inevitable cycle bust was not in the interim a good thing for the US economy as well as for the rest of the world economy, that is if we can climb out of recession quickly enough for it to be relatively ok?

By: Subash K

Subash K — Wed, 26 Nov 2008 13:46:57 +0000

So what is the solution? We see do articles and critical evaluation of why the stimulus will not work. But the detractors do not state as to what the alternative/s is/are. By now most of us know about the problem. The issue is nobody knows or is sure of what the solution should be. Obvioulsy it is not sitting tight and hope the situation clears itself.

Yes, the stimulus might not work. But unless the detractors give some other viable alternative, they do not have a right at this time to analyse why it will not work.