centaurus said:
I am no economist at all , but isn't the $ 800 billions "stimulus" a Ponzi scheme ?
Do you actually know how to define a Ponzi Scheme?
I am not sure I follow you...
Pay-as-you-go Pensions Systems and other social insurance programs where current income is used to cover current expenses but there are insufficient reserves to pay the ultimate benefits as advertised are often criticized as being like "Ponzi Schemes".
Keynesian Fiscal Policy in a downturn is supposed to keep the economy at full capacity so that a breakdown in the economic system doesn't become a vicious cycle where all this productive capacity gets uselessly wasted.
I think most economists would agree that a serious dose of fiscal policy right now is a good idea, the important thing is to run surpluses during boom years so that you are even "over the cycle". Now, the US hasn't been running surpluses through the Bush years which were very prosperous, this was bad economic management.
Given that the private sector isn't investing, the government will hopefully not crowd out private investment and can try and engage in productive investment (energy efficiency, highway 30 here in QC) that will pay for itself over time.
It is true that spending won't necessarily solve everything and some right-wing economists would suggest that you will gain nothing but a pile of debt and, because some of these people don't seem to think any government investment is productive, no assets in exchange. This is a minority view.
That said, I think the US economy is in a very different place competitively and demographically than where it was in the 30-40s. The US was an explosion waiting to happen back then (Texas oil barely touched, young population, it's only economic rivals devastated by war) and so the growth required to pay back the debt came through. This time it's different, so the government will have to be careful to not get too much in debt. Of course the US has one big advantage over the other countries in the world, they can just inflate. Ultimately, I expect that this is exactly what will happen.
It will be interesting what they decide to do about health care, the us system costs a fortune, there must be some way to provide a socialized system without increasing overall costs. One thing for sure, I think we need to train more doctors. In other countries, medecine is a well rewarded profession like engineering or accounting but not a guarantee to such a high standard of living as in the US. This probably needs to change. Not making friends here, am I?
