President Obama has launched a very aggressive stimulus program and the details are just starting to filter down. I won’t pretend to know everything about the bill and if or when it will actually do what it is intended to. There is a parade of talking heads on TV every night better qualified than I to answer that question – unfortunately they never agree on anything. There is some agreement on one point however – by the time the economy recovers nobody will know for sure what exactly caused the recovery and when. It will likely be a combination of factors starting with the stimulus program that was just launched, a natural swinging back of the economic pendulum, or maybe just the fact that your washing machine gives up the ghost and it's time to buy a new one whether you want to or not. At some point we will venture out and begin to spend again. The world has to spend to live.
During this time of uncertainty some novel ideas pop up about how best to deal with certain aspects of the problem. I came across one the other day that made some sense to me. This is an article that appeared in the Washington Post February 22, 2009 written by Ricardo J Caballero, head of the Economics Department at MIT.
Perhaps this idea may gain some traction and be one of the factors that puts our economy back on solid ground. What do you think?