I was, and still am, against any governmental stimulus plan. The plain and simple answer as to why is because they don't work and usually create noise in the economy. The only way things will get better is when the mal-investment is worked out of the system and assets flow from the weak hands to strong hands.
Now with talks of another stimulus plan floating around, on the heels of this year's $787 Billion stimulation, I can't help but wonder if we would make the same mistake twice?
The stimulus plan passed in February “is executing pretty much as expected,” yet it “won’t affect the economy’s primary problems, which are falling values of assets like homes and stocks,” said Doug Holtz-Eakin, who was director of the Congressional Budget Office from 2003 to 2006 and is now president at DHE Consulting LLC in Washington. [via Bloomberg]
Executing pretty much as expected? Wait, and it won't affect the economy's primary problems? Why the hell should we dream of stimulating a second time?
Want to know how to really help the situation and truly firm up the economy FAST. Have the government bailout all middle to lower class residential property owners by forgiving their second mortgages. A large chunk of foreclosures will go away immediately, people will have debt relief and the ability to spend again, and all those subprime portfolios will start to perform again.
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