Wednesday, 11 February 2009

stimulus packages

around the world, governments are crafting policy/spending packages designed to stimulate the flow of money in their respective economies. it seems almost everybody agrees about the need to do something like this but there is strong disagreement about where the money should go. broadly it seems, there are two main camps: the neo-con free marketeers and Neo-Keynesian social liberals. the first are advocating tax cuts and bailouts(to stimulate investment in jobs etc) and the second, government spending (on infrastructure, the poor etc).

the free market idea: give the money to the rich who will give some of it to those who are poorer hence, money flow.

the liberal/social idea: give some money to the people at the bottom and middle of the pyramid and it will naturally flow to the top as it always does - again stimulating flow of money.

the end results of the political horse trading will of course be compromises but i for one, would rather not give the money directly to the people whose reckless behaviour caused our current financial meltdown and would instead like to see some money spent where it is most needed.