Does anyone remember that stimulus plan we got earlier this year? We do, but only because we filed taxes late and just got our check last month. In terms of actually stimulating the economy, it seems to have done absolutely zilch.
Pay no mind to that utter failure, cause here comes another try. Lawmakers are itching to print up more cash, just for the purpose of handing it out, and now Ben Bernanke has given them their blessing. In his prepared remarks to the House, he suggested that a fiscal response should be used alongside the current bailout:
I understand that the Congress is evaluating the desirability of a second fiscal package. Any fiscal action inevitably involves tradeoffs, not only among current needs and objectives but also–because commitments of resources today can burden future generations and constrain future policy options–between the present and the future. Such tradeoffs inevitably involve value judgments that can properly be made only by our elected officials. Moreover, with the outlook exceptionally uncertain, the optimal timing, scale, and composition of any fiscal package are unclear. All that being said, with the economy likely to be weak for several quarters, and with some risk of a protracted slowdown, consideration of a fiscal package by the Congress at this juncture seems appropriate.
It’s unclear whether Bernanke would endorse the normal print up the cash and mail it out strategy. He says it should be well-targeted, but then says the target should be “consumers, homebuyers, businesses, and other borrowers.” So that’s pretty much everyone, right?
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