drawing by marguerita- from The Hormones series
WASHINGTON — The fresh evidence on Friday of the economy’s downward spiral focused even more attention on two questions:
Is the stimulus package being pushed by President-elect Barack Obama big enough?
And will the component parts being assembled by Congress provide the most bang for the buck?
...as the Federal Reserve has been learning for months now, the biggest obstacle to economic activity right now is not a shortage of money. The real obstacle is pervasive fear.
“It’s much bigger than anything that’s been tried in my lifetime, but this is scarier than anything we’ve seen in my lifetime,” Professor Auerbach said.Mark M. Zandi, chief economist at Moody’sEconomy.com, a forecasting firm, told a forum of House Democrats this week that the “bang for the buck” — the additional economic activity generated by each dollar of fiscal stimulus — was highest for increases in food and unemployment benefits
“It’s that current conditions are not normal and are not favorable to rebates or broad tax relief.”
.....economists and policy makers acknowledge that there is no playbook.
“I don’t know of any convincing evidence that what has been proposed is going to be enough.” Plan to Jump-Start Economy With No Instruction Manual - NYTimes.com