Monday, November 30, 2009

Not So Stimulating

Niall Ferguson in Newsweak. Not sure what they are doing publishing Niall's commentary since it is definitely NOT supportive of Obamanism, but hey, maybe they had a troubled conscience. Or not.

This bit pretty much validates what I am continually arguing is the fact.
Meanwhile, let's consider the cost of this muted stimulus. The deficit for the fiscal year 2009 came in at more than $1.4 trillion—about 11.2 percent of GDP, according to the Congressional Budget Office (CBO). That's a bigger deficit than any seen in the past 60 years—only slightly larger in relative terms than the deficit in 1942. We are, it seems, having the fiscal policy of a world war, without the war. Yes, I know, the United States is at war in Afghanistan and still has a significant contingent of troops in Iraq. But these are trivial conflicts compared with the world wars, and their contribution to the gathering fiscal storm has in fact been quite modest (little more than 1.8 percent of GDP, even if you accept the estimated cumulative cost of $3.2 trillion published by Columbia economist Joseph Stiglitz in February 2008).
I think a lot of people are still in denial over this stimulus and its affects. Most people I work with seem to think the stimulus is going swimmingly and deny that this is an unprecedented spending spree.

Well, read it all. It's long, but he makes some outstanding points on the whole economic mess we're living in.

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