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Stimulus musings

2009-02-20 18:22:59.943948+00 by Dan Lyke 3 comments

My response to the "Stimulus Package" has mostly been feeling like... well... like our various elected representatives have been "bend over and we'll give you a stimulus package".

Mark's most recent entry, on the boondoggle that's passing for economics these days, made something clear:

If one were serious about "jump starting the economy", one would be looking toward steps that make people willing to spend money and participate in commerce again. Here's what I think a reasonable stimulus package would look like:

  1. Reinforce support for Social Security. Yeah, you can whine all you want about how people should be saving for their own retirement, but if you're the sort of person who has a right to be doing such whining it's such a small portion of your income it really doesn't matter, and if you must complain about it you can just treat it as some of the more the conservative bits of your savings.
  2. Make a strong commitment towards reducing government spending and government deficits. I think at this point we're all well aware that we're liable for the government debt, and we feel the additional deficit spending as debt. You want us to spend, right? If you're spending money for me, my discretionary income goes down.
  3. Reign in the money supply. Convince me that my future is bright, that my assets are worth something. That I don't need to take every free penny I've got and stuff it into commodities that are going to be relatively inflation stable, rather than keeping that money flowing.

Instead, it sure seems to me like the current set of stimulus packages are designed to make me worry about my future, run up debts I don't have any hope of covering, and showing that the only way out of this disaster is monstrous inflation in a few years. I'm taking personal steps to cover myself for this, but it ain't things that are generally as good for the economy as if I weren't hunkering down and expecting the storm.

[ related topics: Interactive Drama moron Currency Economics ]

comments in ascending chronological order (reverse):

#Comment Re: made: 2009-02-20 20:06:04.587065+00 by: radix

All of that makes good sense. The additional point I'll throw in is that uncertainty is a big killer of confidence. And so far all the steps taken by the administration have a tag on them that says "we reserve the right to change what we're doing and what we're requiring of you at any time". Seems counterproductive to me.

#Comment Re: made: 2009-02-21 10:54:34.77951+00 by: DaveP

I've been spending, but only because the current policies have me convinced that we're going to see some pretty serious inflation before too long because of the huge devaluation of the dollar. "Spend all you want! We'll print more!"

When you need to buy a wheelbarrow to bring enough cash to buy groceries, it's a lot better to be a debtor than a creditor.

#Comment Re: made: 2009-02-21 15:00:36.415855+00 by: Dan Lyke

Radix, yeah, and the "oh, look, your kids are going to have a crushing debt to service" doesn't do anything to make me more certain of the future.

Dave, yep. We're looking at ways to carry more (amazingly low right now) fixed interest debt in exchange for hard goods.