Tags: stimulus | forbes

Forbes: Second Stimulus Would be 'Nuts'

By    |   Friday, 24 Jul 2009 11:08 AM

Some experts are calling for the Obama administration to adopt a second fiscal stimulus package.

Magazine publisher Forbes isn’t one of them. “This is nuts,” he writes in his magazine.

“Hyped-up government spending is useless, if not damaging, for providing sustained economic growth. Our own experiences, as well as those of other countries, particularly Japan in the 1990s and the early part of this decade, have demonstrated that repeatedly.”

The administration and Federal Reserve should instead focus on strengthening the dollar, Forbes says.

“Treasury Secretary Tim Geithner and Fed head Ben Bernanke should both publicly vow that the Fed will not monetize future government debts and that they will restore the integrity of the U.S. dollar by measuring how it's doing against other currencies and commodities, particularly gold.”

While some complain that the Fed is loosening monetary policy too much, Forbes writes: “Incredibly, the Fed, contrary to its reputation, has been tightening since December. Its balance sheets have shrunk by several hundred billion dollars since its year-end highs.”

He points out that “this is deflationary.”

He says “The Fed refuses to take rifle-shot steps to help revive the credit markets for mortgages and for small business and consumer loans.”

Investment legend Warren Buffett disagrees with Forbes about the need for more stimulus. “I think a second one (fiscal stimulus package) may well be called for" to lift the economy out of recession, Buffett told ABC.

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Some experts are calling for the Obama administration to adopt a second fiscal stimulus package.Magazine publisher Forbes isn’t one of them. “This is nuts,” he writes in his magazine. “Hyped-up government spending is useless, if not damaging, for providing sustained...
stimulus,forbes
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2009-08-24
Friday, 24 Jul 2009 11:08 AM
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