Real Wealth Society

Thursday, January 24, 2008

Stimulate This By Danny Schechter.

Stimulate This: Why The Talk of Economic Stimulus Will Remain Talk
By Danny Schechter.

The new word of the week is “economic stimulus package.” Everyone is for it.

The President wants it if only because he knows a worsening economic crisis will leave his Administration in deep doo-doo, the way it did his dad back in ’92. Ben Bernanke, chairman of the Federal Reserve, is all for it if only because all of his rate cuts and “injections” of money into the financial system have not turned the US economy around.

He told Congress Thursday: “put money into the hands of households and firms that would spend it in the near term.” This is likely to take the form of tax rebates and direct assistance.

And all the candidates–well most of them–want it too. Or at least they want something upbeat that will stimulate voters. John McCain lost Michigan, it is said, because he was too negative. Mitt Romney won because he promised to wave a magic wand, repeal Globalization and make Detroit what it once was.

Dream on.

The stimulus idea is simple–give people some money to spend and, presto, our problems will disappear. This is the “Alka Seltzer solution.” Take one tablet and when it fizzes, you’re better in the morning.

The only problem is that the real world isn’t so simple and simplistic solutions will not work.

We didn’t get into this mess because one thing went wrong. Many things went wrong — and over a long time.