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Friday, February 06, 2009

Economics I don't understand, #1

I don't understand how the economic stimulus package is supposed to work. Sure, I understand a bit about Keynes and fiscal stimuli, but a glance at this graph shows that we've been running big deficits for the last several years.

If the government running a deficit was so good for the economy, why are we in the tank now?

And why is this magical stimulus package of more debt going to solve the problem that these earlier hundreds of billions did not?