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According to our government, as of May 22 only $35.9 billion of stimulus funds had been disbursed, out of a total stimulus package of $787 billion. That's less than 5% of the money that in late January and early February was deemed urgently necessary to avoid economic doom. Meanwhile, as I've been documenting for many months, the economy has been busy getting back on its feet with essentially zero help from the stimulus package. Moral: by the time politicians figure out there's a problem and come up with a solution, the problem has already been solved. Corollary: we should avoid political solutions to economic problems.
HT: Russell Roberts
10 comments:
"Moral: by the time politicians figure out there's a problem and come up with a solution, the problem has already been solved. Corollary: we should avoid political solutions to economic problems."
Corollary #2: Obama will shift any blame but take 100% of the credit.
I think you're right, unfortunately.
Scott,
Check out how Turbo Tax Timmy's meeting with the Chinese went down.
Hey Scott-
Thought I'd toss out another green shoot-type indicator that supports your general thesis. Wholesale shipments of Recreational Vehicles have bounced off the bottom significantly. Although still at a low level, both towables and motorized RVs, are up handily from their Nov/Dec lows. You can get these stats on Bberg.
Paul: I don't know how Geithner can say with a straight face that the federal deficit will decline to 3% of GDP.
Donny: Thanks, that's good to know, but I'm not surprised. Everything seems to be bouncing these days.
Scott,
I really enjoy your 'green shoot' posts and spot-on predictions regarding the economic recovery -- please keep them coming, however, based on the following YouTube video of the Financial Services Subcommittee on Oversight and Investigations hearing of May 5, 2009, it is clearly apparent no one is watching the 'store'.
In the YouTube video link below, Rep. Alan Grayson asks the Federal Reserve Inspector General about the trillions of dollars lent or spent by the Federal Reserve and where it went, and the trillions of off balance sheet obligations. Inspector General Elizabeth Coleman responds that the IG DOES NOT KNOW and is NOT tracking where this money is or went.
In my humble opinion there is no doubt we are headed for a real disaster unless something changes the direction of this random money grab bag giveaway frenzy. And I see NO promising solutions at hand.
Here is the link to the YouTube video:
http://www.youtube.com/watch?v=cJqM2tFOxLQ&feature=channel
I know you have a hearing challenge, therefore, here is a brief overview of the hearing from http://mrssatan.blogspot.com/
"The Inspector General of the Federal Reserve in the video below acknowledges that trillions of dollars cannot be accounted for. The astonishing five-minute clip is taken from a Congressional hearing where Federal Reserve Inspector General Elizabeth Coleman is questioned by Congressman Alan Grayson of Florida on May 6th about huge amounts of money for which the Federal Reserve is responsible.
The Inspector General avoids answering almost every question asked by the Congressman. In fact, she appears in this video clip to know less about the finances of the Federal Reserve than Congressman Grayson.
Among the many important questions raised, Grayson requests information on the Bloomberg report that many trillion of dollars in credit have been extended by the Federal Reserve. When the Inspector General avoids answering, Grayson states, "If you're not responsible for investigating that, who is?" Once again, she avoids the question stating, "We've not gotten to a specific level of detail to really be in a position to respond to your question."
At another point, Coleman answers a further question with, 'We are not in a position to say whether there are losses.' Yet if the Inspector General of the Federal Reserve cannot account for trillions of dollars extended, who can?"
CDLIC,
The IMF published an interesting paper on the expansion of the Feds balance sheet. While everyone takes comfort that as a % of GDP, the assets of the Fed are only slightly above the 1950’s levels, the composition is what is cause for concern and has no precedence.” If you look at the Feds role in intermediating credit, the balance sheet has expanded by 4,000% since 2006.”
http://www.imf.org/external/pubs/ft/wp/2009/wp09120.pdf
The stimulus was always a bad idea but it only represents 10% or so of the $12T in capital and guarantees posted by I.O.U.S.A to keep this game alive. I cannot wait to see how the dotUSA Hedge Fund manages to unwind this. My guess is, the first few to get out will get the best deals while the last will be holding a rotten egg. Can anyone guess who will be getting out first???
This guy doesn't read this blog :-)
http://tinyurl.com/n6b3u3
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