Quote from S2007S:
Yep that's what the economy needs, more hundreds of billions of dollars to help continue the prop job. When the fuck are people going to wake up and realize that spending is NOT the answer to this crisis, why does everyone think throwing trillions of dollars at the problem is going to be the solution for this fix in this worthless economy.
Economy Needs Another Big Stimulus Push: Krugman
Published: Monday, 30 Aug 2010 | 5:20 PM ET
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By: CNBC.com
The US economy needs another government stimulus program as big as the one President Obama pushed through Congress in February 2009, economist Paul Krugman said on CNBC Monday.
"Everything is pointing to the need for more spending," Krugman said. "The economy remains depressed."
Such a massive new spending program is unlikely to be proposed soon, however, especially with the mid-term elections approaching.
Krugman said the effects of the stimulus dollars on the economy are fading out, with the maximum impact on growth in the final quarter of 2009.
The money could immediately be spent on infrastructure needs throughout the country that are not being met.
"Even aside from the need to stimulate the economy, when the federal government can borrow very cheaply, thatâs probably a good idea to get some projects started," added Krugman, a Nobel-prize winning economist who is an op-ed columnist for The New York Times.
According to Krugman, the bond market, which has soared to record heights, is in effect saying there's no need to worry about deficits.
"They are happy to lend the federal government money at very low rates," he said. "The bond market is telling us itâs terrified of deflation, of a weak economy for a very long time. So, no, all of the economic data make the case for a stimulus."
Additional stimulus could come from tax cuts, but not tax cuts for the wealthy or for corporations. Neither are likely to spend much of it to make a difference, Krugman said.
"If you give a temporary tax cut to wealthy people who are likely to be highly liquid, they are not going to spend very much of it at all," Krugam said. "Give a temporary tax cut to corporations, who are sitting on piles of cash, they are not going to spend any of it."
A payroll tax cut would be better, since it would put money in the hands of people "who might very well spend it," he added. "But basically, I would take whatever we can, except that those high end tax cuts, corporate tax cuts, are going where the problem isnât; it's just a waste of money," Krugman said.
