First of all, the $787 Billion Stimulus Package is only 5.5% of GDP. Feel free to contrast that with China's stimulus package that is 16% of GDP. At the end of the day, it appears that the elitetraders of ET are casting their vote for a DEPRESSION. For some bizarre reason, I guess these voters actually believed how pure Capitalism was on the way up, and how there were "free and FAIR" markets on the way up. Go figure.
Its even worse than that - not only will it not have any positive effect but long term it will have negative effect. Sometimes doing nothing is the right course. Of course since the public is clamoring for the gov't to do something, it must oblige.
I don't even know why people on ET continue to argue about the pros/cons of the Stimulus Package. It is strictly a sideshow. The much more significant policy is what Geithner decides to do with the banking system . . . and given that Paulson sat there and did virtually nothing but "bail-out" his buddies on Wall Street with direct-investment in preferred's ( and no strings attached ) - - - essentially "punting" the problem on to the next Administration, I'd say that Geithner is in a most high pressure and complicated position. The TARP 1 that came out of the Bush Administration has been a pure and utter failure. And unfortunately, it has put us another 5 months behind the "8" ball as the world economies collapse.
It may be fine and dandy if it was true that this was the only "expense". "All of the major news outlets are reporting that the stimulus bill voted out of conference committee last night has a meager $789 billion price tag. This number is pure fantasy. No one believes that the increased funding for programs the left loves like Head Start, Medicaid, COBRA, and the Earned Income Tax Credit is in anyway temporary. No Congress under control of the left will ever cut funding for these programs. So what is the true cost of the stimulus if these spending increases are made permanent? Rep. Paul Ryan (R-WI) asked the Congressional Budget Office to estimate the impact of permanently extending the 20 most popular provisions of the stimulus bill. What did the CBO find? As you can see from the table below, the true 10 year cost of the stimulus bill $2.527 trillion in in spending with another $744 billion cost in debt servicing. Total bill for the Generational Theft Act: $3.27 trillion."
I understand what you are saying, but at this point in the game I would suggest that it is not the REAL issue at hand.
So labels are more important to you than information? If you were smart you would learn from history instead of taking gospel from a Nobel Laureate whom happens to be WRONG. When it comes to the subject of the Stimulus Plan, Krugman is a Keynesian Nobel Nabob.
I believe the government policy of "do nothing" contributed heavily to the prolonging of the great depression. While I do believe the stimulus package has flaws, I am under the firm belief that the stimulus package is better than doing nothing at all. This is especially true because I live in Canada. I get to reap the benefits of the stimulus package (via increased exports to USA due to increased money supply) without myself or my children having to repay the debt in increased taxes.