Bush Backs Bernanke

Posted by: Gene M. | Jan 18,2008


On Thursday Bernanke testified that a stimulus package was on the way.  Today, Bush unveiled what’s coming: roughly 145 billion dollars in tax relief.  It’s good to see that headline because it’s seemed like Bush is such an international affairs-driven candidate that not much of anything was going to be done before he left office.  It’s felt like we were at a standstill.  Part of the unease for investors about the economy is that no one’s sure what sort of economic stimulus package is going to put forth until 2009, when a new President comes into office.  

The 64-million dollar question (or 145 billion dollar question) is, will this work?  The main thrust of Bernanke’s stimulus package is that there will be tax rebates for low and moderate income consumers.  So in the short term this is going to be good news for a lot of people.  Time will tell if this has a great impact on the economy.  As Henry (Married w/ Children) has been writing in his blog posts, it’s the prospect of a recession that’s just as damaging as a recession itself, so the economy is going to be slow no matter how you slice it, even with the bandaid of 145 billion being thrust into the economy.  

I have to mention, left-leaning that I am, that 145 billion dollars is about a quarter of what we spent on the War in Iraq.  As I mentioned, Bush is an international affairs-based President.  Make no mistake that the money we’ve spent in Iraq could have been used to stimulate the economy more aggressively.  In addition, the uncertainty about the eventual cost of the War in Iraq, and the War on Terror on the whole, are contributing to investors’ unease.  If we used our money more wisely, we would not be facing some of the problems we are.  I’ll go one step further, criticize me if you must: the War in Iraq is not unrelated to the credit crisis on the whole: short-term gains without a long-term strategy.  The entire system both domestically and internationally needs some serious reworking.  The stimulus package is a start but so much more needs to be done.     

Sponsored Resources Ads by Google