Monday, November 17, 2008
Like all Americans, I was raised to believe that the "New Deal" got us out of the Great Depression.
The smart money is calling the New New Deal dead on arrival.
For example, Bloomberg writes:
President-elect Barack Obama and House Speaker Nancy Pelosi may throw as much as half a trillion dollars worth of stimulus at the economy -- and have little or no growth to show for it.
One of the leading authorities on monetary policy says that the Fed and Treasury are "fighting the last war", and using an approach that they think would have worked in the Great Depression, even though the cause of the 2 financial crises are entirely different.
Now, Congress and Obama are set to duplicate the fiscal stimulus approach of FDR.
Instead of being smart and taking actions which will work, all branches of the government appear to be spending sums we can never repay to take actions which will likely be ineffective.