A Painless Recession

How to make a
A RECESSION PAINLESS
The Congress and the Executive branch of the Federal gov’t have embarked on a new mission. How to make a recession painless. The federal gov’t has agreed to spend $300 plus billion on bailouts of various companies plus $750 billion to ease banking liquidity. This does not include $160 billion economic stimulus payment with talk of another stimulus program probably as much or more. These expenditures are in addition to $417 BILLION bugdet deficit. These types of efforts may help keep the the economy at maintenance levels but by themselves will not cause an expansion.

I believe the stated purpose of these moves was to increase financial liquidity so that large banks could lend to small banks, and small banks could lend to main street. However what is happening is that the large banks are sitting on the public money to protect against their own losses or if financially well off they are looking to acquire troubled banks or their assets at bargain prices. Thus at least delaying getting money to main street. Perhaps another example that the “trickle down” republican theory does not work well. Or perhaps main street help was used to sell the public, but the real reason was to help the big banks. This would not be out of keeping with previous Bush administration moves.

Our next message will discuss whether the gov’t can make a recession painless and if it can should it?