Thursday, September 9, 2010

More on the fiscal stimulus

President Obama has proposed a $350 billion stimulus package. The package would jointly focus on infrastructure projects along with investment tax credits for firms. Both of these programs would provide well needed stimulus, but I high doubt a bill can get passed that is as simple as this. Earlier I said a $100 billion package would be too small and larger packages would likely not get passed. I do like how this bill focuses on upgrading the infrastructure in our country. Now why didn't the first stimulus bill do something similar? I am worried about this adding to our long-term government debt, but the longer we stay in a recession the lower tax revenues and higher government spending will continue.

Greg Mankiw does like the idea but argues we need more. Again, citing the need to convert household saving into investment.

1 comment:

  1. I think the idea seems to be alright here, but just needed to be careful, as it’s hard to see how it’s going to work out. We just need to make sure we keep it all in shape to gain maximum. I am always careful with how I work out because even slight doubt can be costly. I always keep it all going accurately which is easier through OctaFX with the long list of features from lowest possible spread at 0.1 pips for all major pairs to high leverage up to 1.500 while there are several other benefits too!

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