“With the recovery faltering less than two months before the November congressional elections, President Obama’s economic team is considering another big dose of stimulus in the form of tax breaks for businesses – potentially worth hundreds of billions of dollars, according to two people familiar with the talks. Among the options are a temporary payroll tax holiday and a permanent extension of the research and development tax credit, say people familiar with the talks.” - The Washington Post
Do you guys think there will really be a second stimulus? I don’t think they noticed how much the last one didn’t do anything at all except a little bit of that beloved inflation. Since I know this is the place to go for researchers, have you guys been able to find anything more about the possibility?
Don’t worry, there will be another “stimulus”. It is in the cards. I count 3 since 2008. (I consider the bailouts to be equal to a stimulus.) These jack asses in Washington are so afraid of admitting they were wrong and the crazy Austrians living in New Hampshire and Auburn Alabama were right, that they will do anything to prevent that. They will even KILL to keep from admitting failure. Besides they have clowns like Krugman et al. to provide them academic cover for their stupidity. Arguing that the last 3 or 4 were failures will only make these people show their courage by spending the wealth of someone not born yet on their friends.
I don’t get why they won’t admit they’re wrong either. Yeah, I had completely forgot that Bush passed a stimulus before the TARP too. But now it’s like, “Okay, so you’re taking a payroll tax holiday and then increasing the benefits it pays for with Medicaid/Medicare and Social Security?” That makes sense.
Bogart,
Thanks for putting the word “stimulus” in quotes. In the old days ('80’s and '90’s) it was called deficit spending. I agree with you, there will be another round of deficit spending tacked on to the existing deficit to “stimulate” the economy. Of course, it will not work. It can’t possibly work, which is the obvious conclusion from AE.
We have entered into a cycle of intervention that I believe will end only when all liberty is gone or when the currency vanishes into a hyperinflationary black hole (after a period of bone crushing deflation of credit collapsing variety).
Just think, your home’s value plummets (credit bubble collapses), you lose your job (malinvested time structure of production), then the currency collapses (due to Fed’s continued “accommodation”).
Oh, boy! The future is bright indeed.
By the way, yes there was TARP (the banking system bailout), but very few folks mention the gargantuan TAG program.
They will simply say that without the “stimulus” (money printing, banking system bailout, and deficit spending), things “would have been much worse”. See, they can’t lose by saying that. They have mainstream economics to back them up.
The mainstream guys will ask you, “what inflation? The CPI is only 1.9%” or some such nonsense.
The answer to your question is, yes, there will be continued “stimulus”, never ending “stimulus”. To support this assertion, I suggest simply reading the headlines for the next 20 years.
The youngest boomers hit 67 in 2031, they hit 85 in 2049. That’s 21 to 39 years of “needed” “stimulus” to cover medical and retirement cost.
All that time, the economy will be in a shambles due to the malinvested capital structure that they continue to prop up. No jobs are being created (to speak of). And they’re going to increase the retirement age! Who’s going to keep an old geezer around until they’re 67, 68, 69…we’ve had it, we’re toast.
If you think 2008 to 2010 has been interesting, we ain’t seen nothin’ yet! Look for QE-2, QE-3, QE-4, permanent QE to monetize the debt. We will get to the point where they will no longer pretend to borrow the money, the Fed will just print what the Congress needs to spend.
I don’t think that we are going to have a “fiscal stimulus” like the previous one, which was largerly based on increased spending, since people have realized that increased spending was mainly a hand out to Obama’s buddies. Just look at the momentum the Tea Party is gaining. Such policy right before the elections would be suicidal for the Dems. However, “fiscal stimulus” in the form of tax cuts is higly possible. Conservative pundits centered around the fox network have been calling for the tax cuts all along, so I am sure they won’t criticize it as much. I’m sure that all the supplier siders would be in favor also. And this might be a cheap way for Dems to buy some extra votes right before the elections. However, this stimulus would be a faliure also since the government would have to borrow the difference. This way it would crowd out the private sector from the loan market to even greater extent.