Saturday, January 31, 2009
What if they are wrong?
The current number for the stimulus package is $900 billion. That is pretty close to a trillion, which it might be very soon. So lets call it a trillion. What's a billion between friends?
This trillion is supposed to save us from a disastrous recession by stimulating economic activity. The proponents have estimated that it will save many jobs (though the percentages are small they are persistent enough to add up). But what if they are wrong?
What if, as I and many others believe will happen, the stimulus package fails. Then this means that the trillion dollars will be a total waste. The recession will cause a lot of pain and impose losses. In the absence of the stimulus package, however, one wonders if these losses would add up to a trillion dollars. (This number dwarfs spending on the Iraq war). So if it does not work we must add the trillion dollars to the losses.
If it does work, will it save a trillion dollars worth of jobs?
Wondering also why its proponents don't consider the probability that it will fail and the cost of that. And why aren't journalists asking these questions?