Tuesday, March 17, 2009

Feeling Stimulated Yet?


We tax all the others and pass the revenue on to you


It must be spring. The swallows returned this morning. It gives me the feeling that at least some things are the way they should be. However...

* * * * *

Another tril? Yep. Ever notice how it's always "the Fed said", not an actual person you might ask questions of? Today "the Fed said" it's going to pump "an extra trillion" (NYTimes) into mortgage-backed securities and Treasury notes to provide more money for lending.

Did you know we had an extra tril lying around? Did TimmyG find it in the sofa?

Here's the deal. The stimulus hasn't stimulated because, inter alia, banks haven't been loaning the money they've gotten. They're moving it around among themselves, sure, but that wasn't the idea -- assuming there was an idea behind all this. Now the Fed and Treasury are joining in to offer a starter package of $200 bil for consumer, corporate investment and small business loans right away. They "hope" this grows to a tril.

There's a problem here. The Fed and Treasury aren't supposed to be consumer lenders, they're supposed to manage our money. They don't have the infrastructure or knowledge to be direct lenders. They and Congress are the ones who thought payday loans were a pretty good idea, remember? Sure you do.

More likely, this is a plan to provide another tril to traditional lenders. You know, banks. Yes, the guys we're already lending to who won't loan what we've already given them specifically for loans!

If at first you don't succeed... keep it up until you run out of money.

The Fed is also buying up another half-tril in mortgage-backed securities.

Anybody keeping count of all this swag?

* * * * *

Remember the $400 stimulus? The one you're going to get that used to be $500? OK, now do you remember why you're getting it? That's right, it's part of the overall stimulus plan. The one that isn't working.

Now compare that to the 2008 $600 stimulus that most of us received. What was the stimulus effect of the $600? Nothing? Right, didn't buy us 5 minutes of a good economy, so don't put much store in the $400 plan. It's all show and no go. Gonna have to get that stim somewhere else. If the $600 didn't work, the $400 is DOA. Don't spend it yet.

All those new jobs? You can forget them, too. Sham. No money + no incentive to invest = no new jobs. Even the government will be cutting back for the same reason: no money. Remember when the prez promised those new jobs at Caterpillar and held hands with the CatPrez? Turns out, they're actually laying off a LOT more employees, not hiring, and now the CatPrez says the administration "used" him. Say it ain't so.

Your $400 isn't going to stimulate the economy. We know that for sure because the 600 bucks last year didn't stimulate squat. So why give us the $400 at all? ... Think hush money.

A spoonful of sugar makes the medicine go down.
from
Mary Poppins

1 comment:

  1. You are scary smart!! I like the Mary Poppins quote!!

    ReplyDelete