The stimulus bill passed a major hurdle yesterday afternoon as the Senate voted to close out the debate and more the bill to the official approval vote today. The argument heard most often is that we have to do something fast because the economy is in such distress.
However, the argument again assumes that Keynes was correct when he theorized that consumer demand can get stuck at an artificially low level and that when that happens the government must step in with extra spending to boost the economy. That is the basic premise of ...<< MORE >>
Friday night we heard that a compromise had been reached and a $820 billion version of the stimulus bill will come up for a vote in the Senate by Tuesday. The White House and members of the Democratic National Committee plan on a series of intense media pressure to help push the final vote through.
But the reality is that this planned bill will do almost nothing for the economy, because like so many economic measures passed by congress in the 200+ life of our country, they are fighting the previous economic situation. The truth is that returning to the ...<< MORE >>
One of the biggest issues with the current economic crisis is just how little time is being spent asking why it happened. While many are happy to demand bailouts and stimulus few are asking what should be the most important question, which is how do we prevent it from happening again.
And the foundations are many, although the biggest one is an old economic nemesis that helped start the great crash that signaled the onset of the Great Depression and even cost thousands of investors their wealth back in 1636 in what is still known as the Tulip Bulb Mania.
...<< MORE >>Of course, most politicians love this theory because they can use it to justify just about any increase in spending. And that's what's happening now. New York Times resident economist Paul Krugman who is a devout Keynesian even suggests that the current stimulus package is going to be too small.
Yet, most historians looking at the time of the Great Depression note that none of FDR's New Deal finally ended the depression and it was only World War II and the need to gear up to a wartime economy that finally returned ...<< MORE >>