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mheslep
#35
Jul7-09, 02:03 PM
PF Gold
P: 3,073
Quote Quote by Ivan Seeking View Post
It couldn't have been a serious question. We have had tons of information about this.
It was serious, though I'll specify further I was referring in particular to the CDS clause. If you believe there's so much information it should be easy to quickly support the the unqualified assertion that
Quote Quote by Ivan Seeking
...a normal recession turned disasterous because of the hidden CDS losses ...
- about a complex subject.

One thing that is rather amusing: We keep hearing from Republicans how the stimulus plan hasn't worked. The fact is that only about one-third of the available money has been spent.
http://www.recovery.gov/?q=content/report-progress

By all accounts that I've heard, the money is only now really beginning to move.
Well please explain then what the endless refrain of 'shovel ready' meant.

The recovery spending is not anywhere close to one-third of the $787B budgeted in the Act, spending is currently less than 10% of the total. Less than one-quarter has any chance of being spent by the end of the year. The transportation spending in particular so far is only ~2% of the transportation allocation.

One of the fundamental problems with stimulus spending as Keynes warned, and for which much criticism was levelled at the Recovery Act during debate: government does not get the spending out fast enough, accurately enough:
Quote Quote by J.M. Keynes
Organized public works, at home and abroad, may be the right cure for a chronic tendency to a deficiency of effective demand. But they are not capable of sufficiently rapid organisation (and above all cannot be reversed or undone at a later date), to be the most serviceable instrument for the prevention of the trade cycle.
http://thinkmarkets.wordpress.com/20...works-skeptic/

If the Obama admin had recklessly rushed the money out, the Republicans would be complaining about that.
Not would be, did, and with good reason. That's an inherent flaw of recession stimulus spending as was pointed out at the time. They certainly did rush out the Act with no more than a couple weeks of debate. Some part of that is unavoidable - at least the 2009 spending has to have been legislated quickly. The whole point (flawed in my view but many economists support it) is to get the money out fast, which requires ill-considered action in haste, and then government machinery is still to slow.

Anyway, no need to query the Republicans, the $787B stimulus package so far has not worked as the Obama administration said it would: Figure 1.