The Democrats are poised to plunge us further into debt with no result by doling out yet still more money into our sagging economy. Will it work? Well, it doesn't attack the problem, so it's doubtful that anything other than more US debt will be created.Why won't it work? The problem started in the housing industry, and that has yet to be dealt with. The stimulus doesn't deal with it. TARP was supposed to, but that turned out to be a schill between the US government and the banking industry (i.e., we got suckered). If they (we) want to fix it, first fix the housing stuff, then the rest will follow as the economy recovers. Look at it this way: if a doctor only treats the symptoms, the disease will never be cured.
One potential solution: if the government were to guarantee mortgages at a rate between 1-2%, people would start to buy/sell / refinance houses again. Once that money begins to flow, everything else will fall into place - just as it fell apart when the mortgage loan economy came apart.
Once again, this is a simple remedy to what is essential a simple problem. But politicians are using it to what they consider their advantage; in the bargain, they will do the wrong thing, as they always do. If only they knew anything about economics.
How about this as part of the stimulus package: Money to send the entirety of congress back to school for at least one year's study in economics. They clearly don't understand it now.
Fed to hold rates near zero, kickstart economy | Reuters
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