The U.S. Economic Stimulus Plan

Council on Foreign Relations by Lee Hudson Teslik | Feb. 10, 2009 (Special Report)

Economists disagree on the wisdom of extensive stimulus spending, as well as the particulars of the current U.S. plan. Given the current economic climate, most mainstream economists now say that the potential downsides of collapse are sufficiently grave that large stimulatory expenditures may be necessary. As the global financial and economic crisis has worsened, this viewpoint has gained international popularity. In a December 2008 paper released by the ... Full Story »

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Dale Penn
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 by Dale Penn - Feb. 10, 2009

I almost never give an article a "5" rating. This article by CRF provides tons of facts, different political and economic perspectives, gives the big picture impact of the stimulus on national debt and global relations, has numerous links and sources to back up the information provided and is accessible to anyone willing to invest 15 minutes to read it. Required reading.

Finally, and perhaps counterintuitively, some analysts point to potentially frightening risks if the stimulus package works too fast. With the world economy destabilized, foreign governments poured money into the U.S. dollar and U.S. treasuries during the latter half of 2008. If a rapid economic recovery leads to a sudden flight from U.S. debt, some analysts say, the result could be inflationary pressures and an environment in which Washington couldn’t borrow as easily internationally. This could potentially press Washington closer to a default scenario.

US default on its national debt is a scenario few could envision, but these are atypical times and it bears mentioning.

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