I was wrong.
In my December 5, 2008 post, I predicted the recession will end in June. I was wrong. It won't end quite that quickly. I didn't realize that the banks were as horribly terribly badly off as they are. Don't get me wrong, I obviously knew that big banks were in huge trouble. I just didn't realize that it would be this bad.
Later this week there will be an anticlimactic announcement on how the Obama Treasury Department will spend the $350 billion remaining from the big Congressionally passed $700 billion bailout for the financial industry. I say anticlimactic because $350 billion is fairly small in comparison to the amount of money which will in the end likely be necessary to pump into the banks and other financial institutions going forward, taking no notice of the huge amount of money which has already been pumped in.
So with the banks still in terrible shape, and likely months away from being cleaned up, I simply have no idea when the recession will end. I'll let you know when I know.
Flying Pink Unicorns
Flying Pink Unicorns
2 comments:
From Larry in California
Deep tax cuts are what we need, will release money very quickly into the economy. 10%, 20 %?????
yeah, because GW's tax cuts really turned the economy around.
Let's face facts. NOBODY knows what will turn the economy around. It's all THEORY. BUT, Bush inherited a balanced budget, a decent economy, and then he cut taxes and favored deregulation. After 8 years of his ideas, we ended up in the worst economy in 50years. That history says it's time to try another economic theory, not cut taxes. Besides, the evidence seems to show that if you cut taxes and put money back in the hands of consumers, right now they're more likely to save it rather than spend it. While saving is generally a good thing, and our country has done too little of it recently, saving is not going to help our economy recover. So the real choices seem to be "do nothing" or a spending based stimulus plan. Not sure we completely got there (spending plan) with the 789 billion dollar plan that was just agreed upon, but I think it's better than nothing. Unfortunately, only time will tell.
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