I am in a sour mood this morning, so I will provide this link for all Those who think they understand the economy. Menzie Chinn is quite correct, the numbers on the Stimulus do not add up–whether the Government or anywhere else. I will try to explain it in humanist terms so Us normal people can understand: The Stimulus is a Band-Aid trying to cover the cut throat of the economy! Two factors have currently saved the Patient: 1) the economy had so much blood to give; and 2) the blood tends to coagulation by itself. This happens to be the reasons Why the economy is not completely dead! Economists have tried to rise to the Challenge, and failed somewhat miserably. Politicians tried to rise to the Challenge, and only jumped into corruptive practice. Business leadership refused to rise to the Challenge, and resorted to thievery. Everyone else pays the bill for it all with Taxes and lost Labor.
I am currently working on the premise that the Stimulus may actually be worsening economic conditions. It is known that all Stimulus is directed towards maintenance of Business Profits, and little seems to working itself through to household Incomes. It is also known that the Stimulus works best at sustaining Business Profits-Taking practices developed over the last quarter-century, allowing Business organization to maintain operations as they were–except for the layoff of labor. Examination of actual Business conditions presents the suspicion that the Stimulus only grants the ability for Business to maintain current Returns while delaying Investment schedules; a definite counter-cyclical effect, and one only I seem willing to discuss. There comes a Time, my dear Readers, where one has to descend into paranoid images, simply to bring Order into your world; this could well be one of those Periods.
It seems apparent that there exists no mode to direct Stimulus to households, a prime necessity for any increase in Consumption. There may be a definite Plan, never discussed, to downsize the economies of the developed nations; and if so, the Corporate demand for cheaper labor remains the culprit behind the design. I cannot totally oppose any such Plan, as there are real Savings to be made from better Quality of Product and Services, but there seems no complementary attempt to improve such Production which can be perceived, though this does not deny its existence. I dislike the methodology of the only apparent movement in that direction, a process of simply making such Product too expensive for labor to purchase. The economic context of it all holds greater clarity: consistency of current Production will lead to another year of reduced GDP, whose only denial will be increased Consumer Pricing. It does not bode well for Labor. lgl