Saturday, October 04, 2008

What next?

If the economy gets worse:
ME: I told you this wouldn't work.
THEM: It's a good thing we did this, or else things would be a lot worse.

If the economy somehow gets better:
THEM: I told you this would work.
ME: Turns out this wasn't needed after all.

Causality can be hard to establish in economics. But our goal now is to monitor the effects of history's most expensive October surprise. The government will have to either raise taxes, go deeper into debt, inflate the dollar even more, or a combination of all three. We might very well see a short term boost in the economy, but the long term effects will outweigh it.

It's rather like taking steroids and saying "I'm getting stronger, this stuff must be good for me." But in the long run, the steroids can kill the person using them.

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