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MOSLER'S LAW: There is no financial crisis so deep that a sufficiently large tax cut or spending increase cannot deal with it.

Congress to send Obama stimulus bill first day

Posted by WARREN MOSLER on November 24th, 2008


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Whether or not you like the details, $700 billion of actual, front loaded spending will quickly turn things around.

Equities could easily double from current levels over the next year.

The credit machine will turn back on with a vengeance.

And without an energy policy that immediately cuts gasoline consumption, CPI could quickly be back over 5%.

Obama Will Get Stimulus Bill First Day, Democrats Say (Update1)

By Daniel Whitten

Nov. 23 (Bloomberg) — Congress will send President-elect Barack Obama an economic stimulus package the day he takes office Jan. 20, two Democratic lawmakers said today.

Senator Charles Schumer of New York told ABC “This Week” today the package will be between $500 billion and $700 billion. House Majority Leader Steny Hoyer, of Maryland, said on “Fox News Sunday” that he believed the Inauguration Day goal would be met, but he declined to put a price tag on it.

“I think Congress will work with the president elect starting now and will have a major stimulus package on his desk by Inauguration day,” Schumer said. “I think it has to be deep. My view it has to be between 5 and $700 billion.”


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5 Responses to “Congress to send Obama stimulus bill first day”

  1. jcmccutcheon Says:

    So are you calling for the SP500 to be at 1500 sometime next year?

    Reply

  2. warren mosler Says:

    yes, with the right fiscal balance that should be met or exceeded

    Reply

  3. vipul Says:

    I’ve been the Obama defender here, but I would be cautious.

    This will be partly frontloaded (tax cuts, unemployment benefits, and aid to the states) but what from what I’ve read a lot of this is going to be spread over 2 years (infrastructure, green energy, etc).

    At the soonest Obama could sign a bill late January. Even then you aren’t seeing an effect for months.

    Reply

  4. tt92618 Says:

    I agree with Vipul – from what I am reading, a lot of this will be tied up in big infrastructure projects, and as a result would likely make its appearance over years, which leaves me less enthused than I might otherwise be. And of course, it still has to make it past the GOP.

    Warren, you said this:

    “And without an energy policy that immediately cuts gasoline consumption, CPI could quickly be back over 5%.”

    To which I respond:

    “Ah, the good ole’ days.” ;-)

    Reply

  5. warren mosler Says:

    yes, the risk to growth and employment is that the package is too small on an annual basis.

    the risk to prices is that demand is expanded and immediately increases gasoline consumption (not that prices can’t go up in any case).

    Reply

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