The Stimulus Plan: Is it Enough?
US Treasury Secretary Tim Geithner outlined President Obama’s plan today, as the US Senate voted to pass it’s version of the stimulus plan for the economy. To get a better idea of what’s involved, I grabbed a couple of videod from Afternoon Rally on the issue.
Here’s Geithner’s outline of the stimulus plan:
He argues that banks are actually working against the economy, by tightening up credit, keeping people from getting the cash they need to keep businesses going or make critical purchase. He states that the stimulus will open up banking, making things more transparent, and breaking the logjam of credit.
The market apparently didn’t like the news as stocks tumbled:
Perhaps there is some wonder if this plan will help, which could involve over a trillion dollars of funds.
I personally wonder how well this plan will work, at least how it is laid out so far. For all the talk of “fixing” the problem, are we fixing the sources of the problem? Have the rules that the US government relaxed for subprime lending, the use of stock derivatives and bad mortgage invstments been “fixed?”
I’m not an economic expert, but the “toxic assets” that the treasury secretary mentions were created by relaxed or sloppy regulation, from my point of view. I’m not sure that throwing money at the problem is a long term solution. He says this is so we can move “aggressively” to counteract the problems, to avoid the problem other countries have caused in the past by acting too slow. I just hope we also have an agressive plan to keep things healthy after the healing.
