Replies to post #77666 on Tornado Alley (PROG)

[arizona1]

So your answer is to do nothing.

Good one.

[DesertDrifter]

the spending stimulus is happening, so it's too late to argue whether it should happen.

i see a few potential outcomes...

1. It fails miserably, and our economy collapses like 30's germany. In which case, worthless dollars can be used to pay china back and they get essentially nothing from us, but we will be in a similar state to when the USSR spent themselves into oblivion at the terminus of the cold war. Fracturing of the Union occurs beyond even Lincoln's worst nightmare, as regional republics develop.

2. The stimulus works. the economy chugs back to life, manufacturing starts again from the grass roots up, and the expanding economy allows for suitable taxation to begin to balance the budget, as if everyone made twice as much money, there would be twice as much tax collected (or more, depending upon your beliefs). like the late 90's balance that happened as a result of technological expansion.

3. The stimulus becomes a hindrance to expansion, and the escalating tax burden keeps wages and velocity of money dampened. It is like a bridge loan that we give ourselves when times are tough by going to a credit card; it means that repaying it will hinder new purchasing, etc. The recovery started before the stimulus money even reaches the streets, so thousands of economists were wrong, a victim of Rooseveldtian groupthink.
Pundits will argue for decades whether the recovery would have ever occurred with the stimulus, and Soxfan will have a brain hemorrhage trying to convince everyone on earth that it was obama is his personal Savior that deserves sole credit.