Nancy Pelosi wrote last week in the USA Today that “we” (meaning the Congress, of course–she certainly doesn’t mean “We the People”) need to do more. Another stimulus package. And it appears that Bernanke is going to support it, even though the Bush Administration has been “cool” to the idea (meaning they will eventually support it, but only after trying to sound like Fiscal Conservatives).
FOR THE LOVE OF GOD STOP!!!
There is NO evidence that the economy will even be slightly “stimulated” by more action by the Fed or Congress. Their meddling has INCREASED uncertainty, not decreased it, and everything looks obviously like it’s been thrown against the wall to see what’ll stick.
The dirty little secret here, and the thing that noone is willing to say out loud:
“Middle Class” stimulus does not “stimulate” the economy. The “trickle up” theory has WAY less evidence behind it than the “trickle down” theory. Tax cuts on the top 1% increase revenues to the government and create jobs. Tax hikes on the top 1% do the opposite. Tax cuts to the Middle Class decrease revenues to the Government and have little effect on jobs.
Maybe it’s not “fair” but it’s the facts.
Bernanke’s support of a fiscal stimulus package further proves that he has no confidence that a monetary stimulus package will have any effect at all. And of course it won’t. One commentar on MarketWatch called a Bernanke speech, “The ULTIMATE sell signal.” He’s not far from the truth.