Tuesday, February 10, 2009

Stimulus-What an Odd Word.

I don't think Adam Smith ever included the concept of a stimulus in his free market agenda. I don't think it's suppose to be part of the theory.

Obama's stimulus was just announced for $2 Trillion dollars. First, I should not refer to it as Obama's because numerous people put it together, and Obama is mostly just the face for it. Second, here in London, I do not believe they have the word trillion in their version of the English language, or have not yet been able to comprehend that amount, so it is the $2000 Billion stimulus. Third, now I understand that deadlines are imposed in order for work to get accomplished, but it seems to me that this plan has been accepted a bit prematurely. It seemed that overnight, the stimulus jumped from $0.5 Trillion (Sorry England) to $2 Trillion!!! That's a fairly large difference. Additionally, it took years of naivety to get to the current dilemma but only a few weeks to solve it. I am fairly certain that most cannot even tell you the reason behind our crisis, and a solution cannot be determind until the reason is. This is why governments continue to fall behind on markets and dare I say it, regulation (man, I hate that word).

Personally, I believe that there should have been more creativity to the stimulus plan. Resourcefulness is the underlying characteristic of the US's large immigrant population and background. If Obama would like to see an improvement in infrastructure, I believe that the government should look for ways to shift resources throughout the structure to realize a more balanced economy. Pumping massive amounts of money in will solve nothing, especially from the psychological standpoint. Basically, we look like the spoiled rich kid in college that blew through all of his money in the first week and doesn't know why, and then is able to solve the problem simply by asking for more. In my plan to redistribute resources, and this is just a minor example, I propose that the government offer Private Equity firms a very good interest rate on debt, as long as it is used to finance the purchase of infrastructural companies. The government will raise money through the debt offering and the firms will provide the government's proposed infrastructure with their excess capital.

2 comments:

  1. Thought you may appreciate this: http://www.sandmonkey.org/2009/02/11/god-bless-the-morons/

    ReplyDelete