In February we published a White Paper on the Stimulus Plan. The impact on the GDP was analyzed and presented. We reiterate it here. The following chart was in the White Paper.
The data can be presented also as below:
Simply put we states that at best we would see a limited impact in 2009 if they deployed the funds and then a peak in 2010 and then it lingers slowly over ten years. This was in February, it is now July. What has transpired:
1. The Stimulus is leaking slowly and mostly to pay States.
2. The tax portion has been abandoned, there really is no tax reduction, and in fact with Cap and Trade we have a massive long term increase. One should remember that the current macroeconomists do assume that the consumer does look ahead, and in the consumer mind there is still doom in the future.
3. The graphs are increases in GDP resulting from the stimulus and do not account for reductions in the GDP from inherent failures in the economy. Thus a 4% increase in 2010 may be a real 1% increase at best.
4. The crazy programs such as broadband and the electronic medical records, amounting to $100 billion of the $750 billion will take years. Remember that broadband requires spectrum and a license, there are none, or a franchise, which takes years. So do not hold your breath. To make matters worse the people seeking broadband funds are all those who have no business experience and even worse do not know anything about deploying infrastructure. The blind leading the blind!
So, what is happening?
1. We see some signs of recovery without any stimulus.
2. The current Congress is placing a tax burden on the people which may kill the economy for fifteen to twenty years, remember Roosevelt. The truth is not everyone liked what he did. And they were not Republicans only.
3. Inflation is always a fear for now in this downturn the Fed is doing the opposite of the Fed in the 1930s, it is reducing rates and blowing up the money supply.
Just remember we told you here first. The Wall Street Journal lists the top 25 economics sites. We know many of them but remember they are macroeconomists or investor types. They always fail to dive into the real details. They were often the ones who got us where we are today.
The data can be presented also as below:
Simply put we states that at best we would see a limited impact in 2009 if they deployed the funds and then a peak in 2010 and then it lingers slowly over ten years. This was in February, it is now July. What has transpired:
1. The Stimulus is leaking slowly and mostly to pay States.
2. The tax portion has been abandoned, there really is no tax reduction, and in fact with Cap and Trade we have a massive long term increase. One should remember that the current macroeconomists do assume that the consumer does look ahead, and in the consumer mind there is still doom in the future.
3. The graphs are increases in GDP resulting from the stimulus and do not account for reductions in the GDP from inherent failures in the economy. Thus a 4% increase in 2010 may be a real 1% increase at best.
4. The crazy programs such as broadband and the electronic medical records, amounting to $100 billion of the $750 billion will take years. Remember that broadband requires spectrum and a license, there are none, or a franchise, which takes years. So do not hold your breath. To make matters worse the people seeking broadband funds are all those who have no business experience and even worse do not know anything about deploying infrastructure. The blind leading the blind!
So, what is happening?
1. We see some signs of recovery without any stimulus.
2. The current Congress is placing a tax burden on the people which may kill the economy for fifteen to twenty years, remember Roosevelt. The truth is not everyone liked what he did. And they were not Republicans only.
3. Inflation is always a fear for now in this downturn the Fed is doing the opposite of the Fed in the 1930s, it is reducing rates and blowing up the money supply.
Just remember we told you here first. The Wall Street Journal lists the top 25 economics sites. We know many of them but remember they are macroeconomists or investor types. They always fail to dive into the real details. They were often the ones who got us where we are today.
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