Economic Stimulus 101 – Part 3

Posted March 12, 2009
 
Economic Stimulus 101

Can we spend our way out of a bad economy? Explore the costs, benefits and impacts.
$130

billion

Amount of money on the table for bailing out the U.S. auto industry. Source: CNN Money.
 

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Will it Work?
What is the stimulus bill’s intended effect, and in what ways could it fall short?

A walkthrough of how the plan is meant to “put a brake” on a bad economic spiral.
⊕ Launch video

“You want tax cuts that affect people’s incentives, in ways that make them more productive, but that’s not the kind we got.” ⊕ Launch video

“If everybody tries to save, then the economy spins down, and everybody loses their jobs, and nobody saves.”
⊕ Launch video
 
Where should the government be investing for greatest impact?

“I think there’s a great need for more investment in public infrastructure.”
⊕ Launch video

“If we factor in the benefits we all get from universal [broadband] access, I think that’s a worthy investment.”
⊕ Launch video

Environment and energy are better places to spend money than war.
⊕ Launch video
 
Does federal spending actually help the economy? A point-counterpoint:

When three of four components of aggregate demand won’t buy, government spending is the only option for stimulus.
⊕ Launch video

“There’s very little evidence that government spending can stimulate an economy out of recession.”
⊕ Launch video
 
Ultimately, will the stimulus bill be enough to “fix” our economy?

“The plan has a mixture of activities and hopefully one or another will do some good.”
⊕ Launch video

“We’re looking at 7 percent stimulus versus 15+ percent depression. The stimulus isn’t big enough.”
⊕ Launch video

Bailout Nation
Should we have bailed out the American auto industry? How can it be turned around?

“Is it in the interest of the rest of society to have this sector disappear completely?”
⊕ Launch video

“If they’re making cars nobody wants to buy, they should go out of business.”
⊕ Launch video

“If I wanted to save the auto industry, here’s what I would do: I would make Mitt Romney the auto czar.”
⊕ Launch video
 
Is nationalization the solution to problems in our banking system? What happens to banks’ shareholders?

“We first need to deal with the issue of insolvency, and the other issue is that banks aren’t lending.”
⊕ Launch video

“If the banks can be made [profitable], eventually private capital will come in and the government can sell its stake.”
⊕ Launch video

“If [banks] become totally nationalized, then the shareholders go to zero, but they’re almost there now.”
⊕ Launch video

 
Produced by Jackie Hai, Richard Caesar and Frank Godinho, AmherstWire.com.