The economy will not get fixed by printing money, taxing/tax breaks, budget deficits/superavits, or ANYTHING else. Look at any M3 money supply chart (before they stopped issuing it). So, the only thing to do is wait and see?
How bout if Joe the Plumber was made Treasury Secretary? 2 of the dumbest ideas that was put forth before this crisis started was: 1) give homeowners money to help pay for their mortgages (by Greenspan), 2) have the govt buy the foreclosed homes and some of the inventory and destroy it and start over (stated by someone else). Ritholtz over at his blog has the current bailout estimate at $4.6 trillion. Maybe it would've been cheaper just to implement one of those 2 dumbest ideas than to journey through the complete and utter bullshit thats going on today.
Sorry but this is completely wrong, the only thing that will save the US economy is GROWTH. The more time passes with low or no growth the more likely we are to slip in to 2nd world status both in terms of our relative power and certainly our standard of living.
There is unlikely to be any REAL growth until the Boomers die off... if even then, it will come from a lower level.
I agree doesn't seem likely but you never know, this crisis and the one that is being set up by all these nonsensical bailouts might be just what is needed to prompt some realtistic long term common sense thinking in Washington. I have friends who have start ups or small companies (mostly in the hi tech and biopharma sectors) that with a little tax break or access to cheap capitol would produce hundreds of high paying jobs. Growth can be created and nowhere more easily than in the US with our relatively unfettered business environment, it is one of the few competitive edges that we still enjoy as a country:nowhere is it easier to start a business than it is in the US. Growth can be created by targeted tax incentives and access to cheap capitol and this is where stimulus money should be going. Spending on public works projects may stave off collapse and massive unemployment but it is a band aid at best and has never resulted in significant growth. Just think about the breakthroughs that a targeted $2T could enable, the mind boggles
growth and productivity increase are what would save the US. the current national debt, even with all the bailouts, is not anywhere near the all-time high when compared against gdp. during ww2, debt was in the 15-30% range. during the last few years it was in the low single digits; with the bailouts it can get into the low double digits (assuming worst case, remember the bailout numbers you hear about are worst case). the US didn't collapse after ww2 despite enormous debt. so everyone calm the hell down
I could be wrong (I often am), but I think that while debt-to-gdp was in fact higher after WW2, it is emphatically not in the low teens after having risen from the single digits. It's more like 70% of gdp (and that's ignoring the imminent social security bill). Maybe you're talking about the annual deficit?
It is highly likely that a primary reason the post-war debt was manageable is that the US had the only significant industrial base left on the planet. This allowed it to be an export machine of extraordinary power into the mid-60s. If you look at other "real" countries that survived through similar debt problems, they did not fare nearly so well without a similar advantage. IMO, both the trade and fiscal deficits need to be dealt with before a sustainable long term recovery is possible. Can't happen overnight, of course, but there is no reason the initial steps can't be taken immediately.