38/365 – Dawn of the stimulus plan

Dawn light greeted me at the apartment.

Dawn light greeted me at the apartment.

When I went to sleep last night, I didn’t check the news, or I would have known that there was a compromise in the U.S. Senate on the so-called stimulus bill.

Despite my earlier skepticism, I now have hope for this idea — to spend and borrow our way out of a recession.

The trouble with economics, well, one of the troubles, is that you have to conduct your experiments in real time, using real economies and real people.  if you’re wrong, millions of lives are affected.  Looking back on past economic activity only gives you some clues, which is why economists have such widely varying opinions on things.  As the joke goes, if you have five economists in the room, you’ll get six opinions.

But know this — if Uncle Sam is borrowing a trillion dollars and spending it, that’s a trillion that won’t be available to businesses.  And if we simply print another billion bucks, the value of all dollars will be diminished, interest rates will go up, and you savings will be worth less.  These are immutable laws, and that’s what scares me about the stimulus.  Good luck to us all.

Leave a Reply

Fill in your details below or click an icon to log in:

WordPress.com Logo

You are commenting using your WordPress.com account. Log Out / Change )

Twitter picture

You are commenting using your Twitter account. Log Out / Change )

Facebook photo

You are commenting using your Facebook account. Log Out / Change )

Google+ photo

You are commenting using your Google+ account. Log Out / Change )

Connecting to %s