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Click through to read the rest of Robot Heart’s analysis. I quoted this bit because it’s the only bit I disagree with. Shame on you Robot Heart: If anything, when a government program fails, the solution is always to throw more money at it. I kid, I kid. Seriously, though, there’s a lot in this package that is intended to be social support instead of stimulus. Even if the package is declared a failure, which aspect will there be political support to end? The infrastructure projects? The extended school lunch program? Food stamps? Health care for the unemployed? None of those will be canceled. Instead, there will be another stimulus package after this one. Later in her post, Robot Heart (correctly) takes issue with strategies that “worked” in 1981, 1997, and 2003, but misses the biggest issue. Those crises were fundamentally different than this crisis. That alone should be sufficient. We’re living the punchline of the fixes for the last couple crises: The solution was to reduce rates, make credit cheaper. and blow an asset bubble. Now that credit was the asset that bubbled and popped, it’s not really possible to use credit to blow another bubble. |
[L]ess money will be coming out of government coffers straight off the bat, and if the stimulus plan doesn’t appear to be working, the money can be pulled.
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