The U.S. Senate is currently wrangling over the economic stimulus bill -- causing a delay to what many feel is an inevitable passage. However, with some moderate Republicans promising to cross party lines, it looks as though there could be a vote on the measure tomorrow.
So, as the economic stimulus bill moves closer to passage, the debate continues to center around whether or not the measure will work. Christopher Grey, at The Street, thinks that the economic stimulus bill will not work:
The entire U.S. economy's GDP is about a $13 trillion and will probably
end up lower than that because it is shrinking. At some point if this
continues, we could get close to the government spending more than the
entire country is producing. Does anyone really believe that this is
sustainable? Of course it isn't, but ignorance is bliss, at least for a
little while until reality sets in.
The flip side, though, is that government spending on some projects may actually create jobs. And if people can use some of their tax cut money (a slim hope, with the amount of cuts being offered) to pay down debt, some of the risks of inflation might be avoided.
In any case, the current economic stimulus package is likely only to offer a short-term solution. Long-term, the way that the economy is set up pretty much ensures that we will have another, similar problem in a few years. And next time, the U.S. may not be stable enough that the dollar will be considered a safe haven currency.
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