A $1 Trillion Stimulus?
Remember the good-old-days (like a month ago) when leading economists were pushing the federal government to boost the economy with $200 – $300 billion in new stimulus spending? Well, they’re gone.
As unemployment continues to skyrocket, the housing market continues to fall and consumers remain reluctant to open their pocketbooks, economists are now urging a package more to the tune of $1 trillion. In a statement set to be unveiled later today, more than 100 economists will make their case why President-elect Barack Obama should back at least $900 billion in stimulus spending over the next two years.
Obama is on board with the concept, saying repeatedly that his first act from the White House will be a huge spending program focused on state infrastructure projects and renewable energy technologies. But he hasn’t yet put a dollar figure on his plan.
Even without the new stimulus bill, the federal deficit is expected to hover near $1 trillion next year, due largely to the long string of Wall Street bailouts already orchestrated by Washington. It gives new meaning to the Keynesian theory that borrowing is the best way to pull through a recession.
Then again, at least we’ll sleep better knowing that bridge we’re driving over isn’t set to collapse.