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$100 Billion Later, the Recession Continues

Published 08/07/08 Craig Harrington - Print Article
E-mail - editor@economyincisis.org

Earlier this year, the Bush administration pushed its so-called “economic stimulus package” on to filing taxpayers in an effort to reinvigorate a stumbling economy. However, as July sales reports come to light it seems as if the stimuli have all but dried up, and the net effect has been negligible at best, according to Reuters.

Many major U.S. retailers posted sales for July which fell well short of projected gains, leaving many to worry about the prospects of the upcoming back-to-school shopping season.

The intent of the stimulus checks had been to grant a sustainable boost to the U.S. economy, but most individuals found their rebates being spent on gasoline, food and other commodities with soaring prices.

As the stimulus checks run their course we have seen little net result in macroeconomic terms. The only lasting effect may be the $100 billion added to this year’s federal budget deficit.


Source Reuters:

"The stimulus (checks) really had a marginal effect at best and it has run its course and there's no carry-through," said Retail Metrics President Ken Perkins.

…

The back-to-school shopping season, the second most important season of the year for U.S. retailers behind the December holidays, is now under way. But in a sign that consumers continue to spend warily, both Wal-Mart and Target issued cautious forecast for August.

…

The U.S. government distributed roughly $100 billion in tax rebate cash to consumers between late April and mid-July, hoping to kick-start the economy. But benefits from the checks were expected to be short-lived as consumers confront inflationary pressures and a weak job market.

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Article Comments From Readers

harry2 says "Fetishized Hypercapitalism or Cans of Instant Fish" on 07/25/09
Fetishized Hypercapitalism or Cans of Instant Fish
DISRUPTIVE INNOVATIONS, (by Prof. Christensen) for RESTORING OUR ECONOMY
To: LARRY SUMMERS (Director of NEC) --- From: HARRY WINTER(S)

Working for years on my paper “EE-Logos.org”, I could only imagined our future to be a . And as you said: “These problems weren’t made in … years, and they’re not going to get solved that fast…, we also have to be mindful of having the right kind of plan that will carry us forward over time.”- President Obama had a much better line for you simplistic “right kind of plan”. He said: “We need to build a new Foundation for Economical Growth in America” With that description I can work.
I will explain, but first, let me say what I see as the real cause of our economic crises. Sure, the blown Housing-bubble and the failed Government-Banking-oversight have caused serious problems, but these all have well known and proven solutions. The FATAL problem for the U.S. economy is simply that wages for workers and engineers are ten times higher than those of other countries. We cannot manufactured “trade-goods” that are affordable to the rest of the World. Instead, we have a Huge Trade Deficit of $750 Billion and factories are closing at an alarming rate. Soon, will have completely our Nation. Our politicians never mention this, because -- they have no solution for it! -- (See next page)

The $787 Billion STIMULUS-program does not address the above problem at all; it stimulates only the local economy weakly in an undifferentiated way. --- This program is obviously not the “right kind of plan” Larry; because it is based on a WRONG DIAGNOSIS, assuming we are only dealing with a cyclic recession. As Business Professor Peter Morici, of the University of Maryland, explains it: “A DEPRESSION is a recession that DOES NOT SELF-CORRECT, because of fundamental structural problems in the economy, such as or a .”

We have BOTH SYMPTONS, and a , which clearly indicates that we were already heading for a MAJOR DEPRESSION years ago. The “stimulus treatment”, recommended by our so called will work only for a ; it never had the ability to miraculously restore our very sick economy. Insisting that this faulty-diagnosis is still correct will cause great misery for hundreds of Millions and even death to hundreds of thousands of our U.S. citizens. --- Is that Treason by Incompetence?

How can our Business Professors believe in a , which restores our Economy miraculously back to life, just by adding Billions of dollars? --- It’s like believing in cans of , just by adding Galons of water. (Webster’s defination: Fetishized adj. [facticius] 1.any object believed by superstitious people to have magical power. [Like a Rabbit’s foot] )

The British author Iain Banks observed this years ago, when he wrote:
”It is in the elevation of this profoundly mechanistic (and in that sense perversely innocent) [capitalistic] system to a position above all other moral, philosophical and political values and considerations that humankind displays most convincingly both its present intellectual immaturity and - through grossly pursued selfishness (rather than the applied hatred of others) a kind of synthetic evil.”

For a time I was baffled when none of the “Stimulus money” was ever directed towards the which our country. The new term of has now opened my eyes. It works by Magic, STUPID! – If you have ever tried to fix things by MAGIC you’ll understand that our economy can’t be restored that way. Understanding that this DEPRESSION can last for decades is easy, my solution is more difficult to comprehend. You need to read my web-pages and do some study on Prof. Christensen’s work, but you don’t need to understand my DSO design, it just works even without magic.
Curious? http://www.msmisp.com/futuretest/index.htm hwinter2@windstream.net.