Shouldn't we listen to this guy?
Peter Schiff warns that Spendulus will lead to "unmitigated disaster" (w/video). "The fiscal stimulus bill being debated in Congress not only won't help the economy, it will make the recession much worse, says Peter Schiff, president of Euro Pacific Capital."
Remember Mr. Schiff? He was the voice in the wilderness warning of a housing collapse and recession while everyone was blissfully flipping real estate:
Oh boy.
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Washington Post business columnist Steve Pearlstein:
"My modest proposal is that lawmakers be authorized to hire personal economic trainers over the coming year to sit by their sides as they fashion the government's response to the economic crisis and prevent them from uttering the kind of nonsense that has characterized the debate over the stimulus bill during the last two weeks.
At a minimum, we'd be creating jobs for 535 unemployed PhDs...
Moreover, much of the money that can't be spent right away is for capital improvements such as building and maintaining schools, roads, bridges and sewer systems, or replacing equipment -- stuff we'd have to do eventually. So another way to think of this kind of spending is that we've simply moved it up to a time, to a point when doing it has important economic benefits and when the price will be less.
Equally specious is the oft-heard complaint that even some of the immediate spending is not stimulative.
"This is not a stimulus plan, it's a spending plan," Nebraska's freshman senator, Mike Johanns (R), said Wednesday in a maiden floor speech full of budget-balancing orthodoxy that would have made Herbert Hoover proud. The stimulus bill, he declared, "won't create the promised jobs. It won't activate our economy."
Johanns was too busy yesterday to explain this radical departure from standard theory and practice. Where does the senator think the $800 billion will go? Down a rabbit hole? Even if the entire sum were to be stolen by federal employees and spent entirely on fast cars, fancy homes, gambling junkets and fancy clothes, it would still be an $800 billion increase in the demand for goods and services -- a pretty good working definition for economic stimulus. The only question is whether spending it on other things would create more long-term value, which it almost certainly would."
"Where does the senator think the $800 billion will go? Down a rabbit hole?"
Well fuck! Why don't we all just max-out our credit cards on more crap we don't need? That's basically what the government is doing.
You say we have a catastrophic amout of debt? Let's print more money!
If a stimulus plan is nothing more than spending, then my teenager has a plan.
I dearly wish Mr. Schiff were wrong, but I don't think he is.
http://www.oftwominds.com/consulting/PYTC1.html
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