Wachovia: Obama Stimulus Won't Stop Awful Recession

If you were an appliance manufacturer, would you expand your facilities, hire more permanent employees, and ramp up production in response to a one-off boost in government spending?

And if you're a construction worker cashing those government project checks, are you likely to go out and spend that money on new appliances, when you know that the government spending spree will be over very shortly and those check might stop coming?

The money that people receive from a government spending stimulus is not equal to the money received from genuine free market activity. The latter is self-sustaining and perpetual; the former is only temporary and entirely dependent on the health of the free market.

A massive government spending program, given its inherent limitations, will have no lasting effect on economic confidence and the willingness to take risk. Savvy business leaders will look forward, one or two years down the road when the spending halts, and plan for that day.

If the tax, regulatory, and financial situation is the same or worse then than it is today, business activity will reflect that reality.

Business people deal in reality, and government spending is NOT economic reality. It is ersatz economic activity, and no businessman worth his salt would make permanent plans based on it.

Cut Taxes, Cut Spending, Restart The Economy

Dean of MN 10:57AM December 10, 2008

This is not just a Republican caused problem. This crisis got it's start with your beloved Mr. Clinton, and sadly Mr. Bush continued a lot of the same policies. Mr. Obama will not be able to chnage a thing. Sure he'll do some things that "might" appear to be a good solution but in the end will one of two things; put more restrictions on US companies to compete or move the United States closer to a nationalized economy. Either way these will not be a solution.

Keith of MO 10:07AM December 10, 2008

The term stimulus has been very misused during our current economic challenges. Simply giving out money expecting it to be used to boost the economy is fools play which will never happen. People are in survival mode at present ergo all monies received are used for self-preservation. Any "Stimulus" must be with appropriated funds for a specific purpose as part of a comprehensive economic recovery plan. I think it best to develop a plan focusing upon employment and sound fiscal policies with some type of return on investment whether it be infrastructure, tax revenues, public investment, etc... I.E. A new bridge is needed therefore create an appropriation via municipal bond sales backed by federal guarantees creating jobs, tax revenue, install temporary toll booths on completed bridge for say 5 years to offset costs and possibly pay for additional projects, investors also receive a ROI per share, with the munis eventually repaid via tolls, tax revenue, outside investments, advertising, etc... By allowing more entities to have a stake in our recovery any stimulus aids more than simply one layer of society. We must STOP giving things away with nothing in return. Even charging a paltry 1% interest is better than a blank check!!!

Ray Fisher of NM 10:01AM December 10, 2008